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Old 01-22-2018, 12:26 PM
 
Location: Aurora Denveralis
2,981 posts, read 1,017,500 times
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Quote:
Originally Posted by hitpausebutton2 View Post
what do you suggest in getting even? Other then buying a home and/or renting it out.
I don't have a useful answer in this narrow range. Better housing and better housing value would be collateral improvement from other changes, none of which will happen this week.
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Old 01-22-2018, 12:33 PM
 
2,360 posts, read 1,027,668 times
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Quote:
Originally Posted by Quietude View Post
I don't have a useful answer in this narrow range. Better housing and better housing value would be collateral improvement from other changes, none of which will happen this week.

Yes i can agree with that statement. Back to the topic, it seems to go hand in hand.. Say a new developer comes in to town and buys up land and builds out. He starts off in the 100k for the homes, not realizing the media in the area is in the low 30s, so he has to adjust the house to low 80s to make it more reasonable to get loans in the area. Now a new business comes in to town and the media is in the 50s, and now the same house that was 80k, is now in the upper 100s. Why made that adjustment when your houses were selling at 80k and business is thriving. Now those that didnt get in on the new business job, as you know they only have so many openings, are left out and cant get approved because of the new rise in prices vs rise in their payroll.
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Old 01-22-2018, 12:41 PM
 
64,551 posts, read 66,100,109 times
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Tha is how housing works . The idea is to make the investment before an area grows . All of the catskills in ny was like that. You had so many over the decades trying to buy in before gambling was approved. You see it in cities in gentrified areas
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Old 01-22-2018, 12:50 PM
 
5,605 posts, read 4,159,335 times
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Quote:
Originally Posted by hitpausebutton2 View Post
Yes i can agree with that statement. Back to the topic, it seems to go hand in hand.. Say a new developer comes in to town and buys up land and builds out. He starts off in the 100k for the homes, not realizing the media in the area is in the low 30s, so he has to adjust the house to low 80s to make it more reasonable to get loans in the area. Now a new business comes in to town and the media is in the 50s, and now the same house that was 80k, is now in the upper 100s. Why made that adjustment when your houses were selling at 80k and business is thriving. Now those that didnt get in on the new business job, as you know they only have so many openings, are left out and cant get approved because of the new rise in prices vs rise in their payroll.
First of all you have it backwards. Builders know what home values are before they even acquire the land. They know what the houses will cost to build, what land will cost, what permits and regulations are necessary. A homebuilder who just randomly buys some land and builds some homes only to discover he's overpriced and has to reduce them all won't be in business long.

As to your question I bolded above, the answer is because the costs of building supplies, labor, land, permits and everything else that goes into building a home rises. Only way to maintain the margins (difference between what it costs to build and what he sells it for) is to raise the selling price. Why would any builder in his right mind continue to sell homes at 80K when he was once netting 30K on them and now is just making 10K? Especially if the market (which being a wise builder he researched completely) will bear a home price of 100K. The increasing the sales price by 20K negates the increase in his build cost and preserves his 30K net per home.

You seem to think that building costs are static and therefore what houses sell for should be also. That's never been true nor will it ever be true.
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Old 01-22-2018, 01:32 PM
 
2,360 posts, read 1,027,668 times
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Quote:
Originally Posted by UNC4Me View Post
First of all you have it backwards. Builders know what home values are before they even acquire the land. They know what the houses will cost to build, what land will cost, what permits and regulations are necessary. A homebuilder who just randomly buys some land and builds some homes only to discover he's overpriced and has to reduce them all won't be in business long.

As to your question I bolded above, the answer is because the costs of building supplies, labor, land, permits and everything else that goes into building a home rises. Only way to maintain the margins (difference between what it costs to build and what he sells it for) is to raise the selling price. Why would any builder in his right mind continue to sell homes at 80K when he was once netting 30K on them and now is just making 10K? Especially if the market (which being a wise builder he researched completely) will bear a home price of 100K. The increasing the sales price by 20K negates the increase in his build cost and preserves his 30K net per home.

You seem to think that building costs are static and therefore what houses sell for should be also. That's never been true nor will it ever be true.
True, but what if the business market in the town dies and town goes under as its major employer leaves. Then what to do then? Sell the house at a lost or still believe that the market can still hold 100k homes in the area? In real numbers, what does a typical home cost the developer? is what i like to know. This gives more power to the buyer, if they are asking 100k for home and it really cost them 30k to build.
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Old 01-22-2018, 01:42 PM
 
Location: Aurora Denveralis
2,981 posts, read 1,017,500 times
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Quote:
Originally Posted by hitpausebutton2 View Post
True, but what if the business market in the town dies and town goes under as its major employer leaves. Then what to do then? Sell the house at a lost or still believe that the market can still hold 100k homes in the area? In real numbers, what does a typical home cost the developer? is what i like to know. This gives more power to the buyer, if they are asking 100k for home and it really cost them 30k to build.
Dude. I think we're pretty much on the same side of the arguments. But you've asked/argued the same small circle of questions for about a hundred posts now.

What exactly do you want, except for housing anywhere you choose to live to be cheap and stay cheap?
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Old 01-22-2018, 01:50 PM
 
5,605 posts, read 4,159,335 times
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Quote:
Originally Posted by hitpausebutton2 View Post
True, but what if the business market in the town dies and town goes under as its major employer leaves. Then what to do then? Sell the house at a lost or still believe that the market can still hold 100k homes in the area? In real numbers, what does a typical home cost the developer? is what i like to know. This gives more power to the buyer, if they are asking 100k for home and it really cost them 30k to build.

It costs him the TOTAL of all the costs to build. Why is this confusing to you? You seem to think the housing market adjusts quickly. It does not. If a town loses major employers causing salaries to fall, housing prices will follow. The town will eventually shift from high COL to low COL. But it's not going to happen over night and I fail to see what that even has to do with your thread topic.


You've beaten the dead horse multiple times. It's far past time to accept that if you choose to live in a high COL area, you will pay high COL prices.
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Old 01-22-2018, 02:20 PM
 
2,360 posts, read 1,027,668 times
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Quote:
Originally Posted by Quietude View Post
What exactly do you want, except for housing anywhere you choose to live to be cheap and stay cheap?

Housing, food, retail.. Yes it would be a dream come true if the market stay the same in prices. It wont push the middle class out of its price range/budget. Because raising prices only puts your company in a selective group of people. Same people that was able to afford it, now can not because you want only want the "rich group" to buy from you. If market would stay the same till payroll catches up, then our economy would start to thrive again and life wouldn't be such a struggle. You wouldn't have to stress out over paying for loaf of bread or paying to get new tires.
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Old 01-22-2018, 02:55 PM
 
5,605 posts, read 4,159,335 times
Reputation: 12338
Quote:
Originally Posted by hitpausebutton2 View Post
Housing, food, retail.. Yes it would be a dream come true if the market stay the same in prices. It wont push the middle class out of its price range/budget. Because raising prices only puts your company in a selective group of people. Same people that was able to afford it, now can not because you want only want the "rich group" to buy from you. If market would stay the same till payroll catches up, then our economy would start to thrive again and life wouldn't be such a struggle. You wouldn't have to stress out over paying for loaf of bread or paying to get new tires.
In no point during history have a loaf of bread and a set of new tires been the same price so that's a moot point. And yes, they are a selected group of people. They're called "The People who can Afford what I'm Selling". Businesses cater to and market to those people. And those people are comprised of all income levels. Do you really believe McDonald's pushes the dollar menu because of the "rich group"?

If you were a business and in business to make money, why would you undersell your product? Why would you sell it for $5 if the market supports a $10 price tag? If you didn't increase prices until the lowest paid people in town could afford it (which seems to be what you're suggesting) you'd be out of business long before that happened. Why? Those pesky cost of goods and labor and taxes and utilities and repairs and maintenance of your facilities have gone up to the point where you're losing money while you were waiting for salaries to catch up.

And lastly, the middle class can afford food, housing and retail goods. Maybe not exactly where they want to or everything they want, but they can and do afford to live. They’re constrained by the size of their budgets, just like everyone else.

Last edited by UNC4Me; 01-22-2018 at 03:12 PM..
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Old 01-22-2018, 06:20 PM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
4,111 posts, read 3,402,459 times
Reputation: 5633
Quote:
Originally Posted by hitpausebutton2 View Post
Housing, food, retail.. Yes it would be a dream come true if the market stay the same in prices. It wont push the middle class out of its price range/budget. Because raising prices only puts your company in a selective group of people. Same people that was able to afford it, now can not because you want only want the "rich group" to buy from you. If market would stay the same till payroll catches up, then our economy would start to thrive again and life wouldn't be such a struggle. You wouldn't have to stress out over paying for loaf of bread or paying to get new tires.
There are lots of people that can afford houses. Many areas the market is moving quickly and prices are going up, yet the houses are still selling quickly. So why do the prices need to stay level until payroll catches up. It seems payroll has already caught up. It not just the rich people buying, well unless you consider everyone else who buys a house richer than you. Even people in the middle class are buying, so you must actually be poor if you are not middle class and can't afford a house. Well that and having credit issues.
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