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There 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 t
by beezlebroxxxxxx 3y ago
There 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.