In northeast japan, a earthquake with a magnitude of 9.2 hit, and in this article, it shows how the land price in japan dropped largely compared to the previous year. The prices of this year were shown on the 20th of September, and in average, land prices dropped by 3.4%.
The price of land changes largely every year, and can be affected by different factors. This is because the demand in these products change over time, and the earthquake is for sure a large factor that would affect how people would demand in the product. One large reason why the price of land decreased is because of the accident in the nuclear power plant. This is because of the rationing function of price. Because of the earthquake and the nuclear power plant accident, a lot less people are willing and able to buy land in japan, and this would mean that the demand of the land would decrease.
This is how it would look in a graph. Due to the decrease in demand, the demand curve would shift to the right. the supply curve would not change. This would make the price of equilibrium to decrease. On March 11th, it made the demand in land to decrease suddenly, to make excess supply. The price of a product usually shifts to the equilibrium price, so this is why the price of land decreased. The price of a product adjusts to an equilibrium price so there is no excess supply. If there is more of the product supplied compared to the quantity of the product in demand, this means that there is a amount of product that is making no sells, and there would be no profit. This is why the price decreases, so there is more demand in the product, and there is no excess supply.
The price of land is very easy to change, so it will take time for the price to go back to its original price. For the price to go back to what it was before, people will need to think that it is safe to buy this product. At the moment, it has only been 6 months since the earthquake, so consumers are still not confident that they should buy land in the area. The first thing that must be done, is for the area to recover from how it is now, and that is how the whole area is still largely affected and destroyed by the earthquake and tsunami. Even if the area has recovered, the fear that people have against another earthquake would affect the demand, so it would take longer for the price to go back to how it was before the earthquake.