The paper employs real option approach to explore land supply timing strategy and analyze land management flexibility and its value under dynamics and uncertainty of land market quotations. The results show that the uncertainty of land market induces option value, the option value decreases with the opportunity loss growth of land supply, and local government’s land option value increases and acquisition cost decreases and investment returns don’t lower if the risk free rate rises. It is concluded that, local government should hold land and not go short, cut land backup holdings if the opportunity loss grows, and regulates land market by integration of land policy and interest rates adjustment because rates influences the investment returns of land developer more than local finance revenue.