Panelist Laurie Lustig-Bower, EVP of CBRE, says that development, at least in Los Angeles, is very strong. “We broke out of that recession and prices started to escalate, especially for land. And every year, land has gotten more expensive,” she said. “Now we are starting to see that people are starting to look at land for condos, which we haven't seen since 2007.”

The market has been very active and continues to maintain its momentum, she added. “We will see it for a long time to come because we have been starved for units for so long and now we are playing catch up.”

There is a lack of existing product on the market and the properties you see on the markets have such low cap rates that they feel they can't really make a return on it, she said. “We have seen some of those investors turn into developers because they can get a higher yield by developing rather than buying existing.”

Lustig-Bower expects to see those escalations year after year until “something dramatic happens, like a jump in interest rates or something of that nature.”

John Santry, EVP of acquisitions and development of Shopoff Realty Investment, pointed out that many of the development that is happening is by foreign buyers, which “have shown a lot of interest.”

A lot of Chinese buyers are coming through, and that is going to continue, said Lustig-Bower. “Going forward, we will see more investment coming over from China.”

In preparation for this event, Lustig-Bower told GlobeSt.com's Kelsi Borland that foreign investors are specifically looking at high-profile development sites. There is a “high desirability across the buyer spectrum, from domestic to international clients that are looking for land to build either apartment communities or condominium communities,” she said.

“Foreign investors are making it very competitive for domestic buyers for the high-profile deals,” she previously told GlobeSt.com. “We have seen a handful of high-profile transactions where foreign investors have been able to out price domestic buyers- for sites like Metropolis and Fig at Central in Downtown LA as well as 9900 Wilshire in Beverly Hills. All three of these properties were marketed globally and the Chinese were able to make the winning bid.”

“The high-profile deals are getting a lot of attention from foreign buyers for three reasons in my opinion: they are in prime locations, are large scale projects and have some unique features," said Lustif-Bower. “These properties are also being bid-up by domestic buyers as well; however, lately, the foreign buyers were able to win the bidding. We are experiencing greater demand from the Chinese to buy development sites in Southern California than anytime I can remember in my 26 year career with CBRE. Their appetite has now grown to include “bread and butter” development sites as well as the high-profile sites.”

However, foreign investors aren't the only reason land values are rapidly increasing. According to Lustig-Bower, the combination of the recovering market and the rise in single-family home values is making developers all the more bullish. “When single-family home prices go up, condo prices typically follow. When you couple this trend with high-profile sites, that is when you see prices for residential sites get really competitive," she notes.

Although Lustig-Bower is a Los Angeles market expert, she sees similar trends in A locations nationally. “Desirability for new residential development for either apartments or condominiums is very strong given the market fundamentals across most of the country," she explains. "Pent up demand from a lack of development during the recession, improving job growth, steady rental rate growth, very high occupancy and increasing single family home prices, are all factors that entice new development. I would venture to say that many of the A markets have either reached their 2007 rental rate peak or have surpassed it.”