Okay, an odd idea (would you expect any less from me?), but I saw a commercial for McDonald’s Monopoly this morning and it got me thinking.
I love Monopoly, it’s easily one of my favorite games. I enjoy it so much that my friends hate it and typically refuse to play it with me anymore. I find it to be a great study on economics and real estate.
I’ve been watching a couple of large homebuilders in particular buying up every single square inch of available land along the main arterial road near my house, bulldozing it and starting to build. I saw some property that one in particular purchased back in February, when there were already murmurs of a slowdown. People I spoke with that are typically in the know expected them to break land the following February. However, they’ve been going like gangbusters to get the development built.
This is one of about 5 developments on the same 5 mile stretch of road with at least 20 houses in each. Judging by the flood of signs along the roads and posted price decreases, they must not be moving like the used to.
I ran across this video the other day (and associated post) that discusses that new home prices need to drop further, inventory is at absurd levels, etc. I know a lot of corporations in my area are downsizing, yet building is increasing dramatically while the market is adjusting. I also understand that gears have already been put in motion to get these developments built, but it just seems like this will further push prices down due to an even larger increase in inventory.
To this outsider, it looks like some builders forgot about their childhood Monopoly games (and the news that we just can’t get enough of) and are getting into the hype from the McDonald’s Monopoly advertising.
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