3 ms·
That stuff really isn't that expensive though, I mean it adds up, but the real cost is the multi levels of labor mark ups going through contractors for the labo
by hattmall 3y ago
That stuff really isn't that expensive though, I mean it adds up, but the real cost is the multi levels of labor mark ups going through contractors for the labor to ultimately be done by someone with very little experience making very low wages.
You will have a "builder" who hires a GC, the GC will then hire subs. The subs will bring in crews and the crews are typically two guys with a truck and whoever they picked up at home Depot that morning.
Every one prices per job except the home Depot laborers that end up doing all the work and they get like $100 / $150 a day cash. But they are who is doing 90% of the work.
In the 40s when you hired someone to build a house they actually built the house, like would be out there sawing or even straight up milling the wood themselves.
Today almost no one that's experienced does new construction where they actually do work themselves. The actual quality workers are all in remodeling because the price to time/work/labor ratio is so much more profitable.
- beezlebroxxxxxx 3y agoThere is also just simple supply and demand in many areas of NA. There aren't enough houses to match demand, so developers don't even really need to focus all that much on cost control when building: you're already making a killing on the initial sale. A new home that sells for $1mil in a neighbourhood vs one that sold 2 years earlier for $700k is not wildly better made, at least $300k more; people are just willing to spend that much more for a limited supply.
- sokoloff 3y agoThe $700K purchase price two years ago is worth ~$800K now.
- htag 3y agoNew construction homes are almost universally Value of Land + Cost to build structure + ~10%. The supply/demand aspect of new construction cost only factor into the value of the land, and how increased demand can cause increased labor/material costs. It's not like real estate developers pull numbers out of a hat to determine how much to charge. Most areas will have several major developers in direct competition to attract new home buyers, and if their costs every get out of hand people will just start buying land and managing the build themselves.
- reaperman 3y agoWhat would you advocate to lower the cost of housing by 50%? Personally I suspect the land cost is one huge part of why people don't build their own homes today. Today's version of the sears catalog home would be like "2 dozen people buy a small plot of land together in/near the city and build a condominium to share the land in a cost-effective way". But while random people can build a basic pre-fab home with lots of determination, they probably can't build a 5-over-1.