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Due to the cost of real estate and the fact that the land is worth a lot more than the dwelling (in terms of value and cost to build), it makes sense that the developer will build to maximize their profits. That's just business.. its capitalism. Supply/demand sets the price.
Call it greed if you will... but greed is good when you are the one that takes in the profits.
Yes.. it sucks but since they are still building in such a manner, I figure there is people willing to pay for such properties. the reality is that I simply don't compete in terms of income. We've accepted that reality. Hence why we are a 5 person family living in a just under 1000sqft 2bed/1bath home that we purchased right out of college and it is just shy of a few months of being paid off. We decided that where we can excel financially is in savings, retirement, investments instead of real estate. We already sitting on a decent nest egg (and we aren't that old) and will end up being mortgage free earlier than most US home owners.
As a side note. My office is in a very high end community... nothing is less than a couple million. There was a small neighborhood of modest homes that existed when the area was still farm land. A developer went in and bought out the entire neighborhood.. it went on for years of negotiations with each and every home owner. Once done, they demolished the entire neighborhood and built a complex of townhomes/condos... starting at 700k and up. If you want to know where middle class living is going in the near future, it is in townhomes/condos and apartments... Instead of developers maximizing profits with a single home, they do it with several smaller units.
While I the thought of buying a home right out of college was scary and seemed stupid at the time, I now realize it was one of the smartest moves financially I made as a naive young adult... I just didn't realize it at the time. Cheaper than most crappy apartments, my own property, with a good school, and good town.... being stuck here isn't all that bad... lol
Due to the cost of real estate and the fact that the land is worth a lot more than the dwelling (in terms of value and cost to build), it makes sense that the developer will build to maximize their profits. That's just business.. its capitalism. Supply/demand sets the price.
Call it greed if you will... but greed is good when you are the one that takes in the profits.
Yes.. it sucks but since they are still building in such a manner, I figure there is people willing to pay for such properties. the reality is that I simply don't compete in terms of income. We've accepted that reality. Hence why we are a 5 person family living in a just under 1000sqft 2bed/1bath home that we purchased right out of college and it is just shy of a few months of being paid off. We decided that where we can excel financially is in savings, retirement, investments instead of real estate. We already sitting on a decent nest egg (and we aren't that old) and will end up being mortgage free earlier than most US home owners.
As a side note. My office is in a very high end community... nothing is less than a couple million. There was a small neighborhood of modest homes that existed when the area was still farm land. A developer went in and bought out the entire neighborhood.. it went on for years of negotiations with each and every home owner. Once done, they demolished the entire neighborhood and built a complex of townhomes/condos... starting at 700k and up. If you want to know where middle class living is going in the near future, it is in townhomes/condos and apartments... Instead of developers maximizing profits with a single home, they do it with several smaller units.
While I the thought of buying a home right out of college was scary and seemed stupid at the time, I now realize it was one of the smartest moves financially I made as a naive young adult... I just didn't realize it at the time. Cheaper than most crappy apartments, my own property, with a good school, and good town.... being stuck here isn't all that bad... lol
While I think it’s amazing that you’ll be mortgage-free soon, God bless you for living with 5 people in such a small home with ONE bathroom! My wife and I currently live in a 750 sq ft. apartment and the lack of storage and our tiny kitchen with hardly any counter space to prepare meals (we can’t work in the kitchen simultaneously) has us clamoring for a house already. Doesn’t have to be a massive house, but at least 1,500-1,850 sq ft.
The housing stock in North Jersey sucks for middle class people. One of the many reasons why i'm heavily considering moving is because you can attain such a higher quality of life elsewhere; even if you take a big salary cut.
It's sorta painful watching most of my middle class friends who live just about anywhere outside of the NYC metro area enjoy nice fresh new homes that they were able to attain easily; while the only thing available to us over here are small beat-down 1950's capes/ranches, condos or stuff in crap neighborhoods (all with insane tax bills attached to them).
I hear you buddy. I see the homes my friends/family have in Texas, North Carolina, Georgia and Florida that they’ve bought for pennies practically and I’m in awe. Most of them can afford to have the wife at home with the kids. I’m dying to leave NJ, but wifey is still not ready to let go of family here.
I am in a Bergen Cty town with excellent schools and no empty space. There are lots of capes and ranches from the 1950s on 100 x 100 lots. Expanded capes go for about 500k. A builder just bought an old person's cape on a 100 x 100 lot for 350k. They stripped it down to the foundation and built a 3300 sq ft 4br 3.5 bath, 2 car garage house. It is not a fancy house and sort of fits in with the capes and ranches. If we estimate $150/sq ft to build it, the cost just to build was about 500k. When you add in the 350k to buy the original house, the total cost is at roughly $850k plus architect, permits, money cost. They are asking 960k and the builder told me they have 2 offers already. There is not a lot of profit in this situation.
This is the smallest rebuild in the neighborhood so far. There are 4 recently built knockdowns in the 4400 sq ft range built on some of the few 100 x 150 lots.
The idea that the builder should build a smaller house and make less profit is ludicrous.
If we estimate $150/sq ft to build it, the cost just to build was about 500k. When you add in the 350k to buy the original house, the total cost is at roughly $850k plus architect, permits, money cost. They are asking 960k and the builder told me they have 2 offers already. There is not a lot of profit in this situation.
I highly doubt it cost 500k to build that house given that one can get the same size house in lower cost areas for around 300k. No way the builder is going to make enough of a profit to make it worth it. Anyone with insider knowledge know how much it would actually cost in NJ?
There are zoning restriction on new construction with minimum lot sizes that doesn't apply to old construction. In the Howell area there are plenty of old construction single family homes in the $300-$400K range. Many with large lots of 1/3 acre or more. Many with city water and sewer and natural gas. Many have been updated. All you need to do is look.
It’s unfair to call that greed. Constructing a high end kitchen is probably not much more work than constructing a modest kitchen. Would you leave your current employer to do the same work for another company for less pay, everything else being equal?
I agree with him and think it’s ridiculous greed. If I go to a store, should the clerk force me to buy Versace jeans when I asked for Levis?
Probably your best bet is to find someone who is on the newer side and hungry for clients versus an established builder.
I don't understand, the options in NJ for new construction are either townhouses/condos with HOA or Single Family Homes with >3000 sq ft. that cost nearly 1M$+ that cost a fortune to maintain let alone utilities.
Developers can at least leave a 5-10 ft space gap when constructing a home and charge an extra 100K+ rather than create a water fountain entrance to the development.
New construction many times is inferior to a house built years ago.
Many new homes use EFIS(synthetic stucco) which present a host of problems.
Older homes many times have a much larger lot.
Some new homes settle resulting in cracking of foundations/walls(which you won't find out for a while.
Hopefully the new home won't have Chinese drywall which gives off sulphur and corrodes plumbing and electrical systems.
Love the 70's masonry home verses the 2020 EFIS or Vinyl sided home.
While I think it’s amazing that you’ll be mortgage-free soon, God bless you for living with 5 people in such a small home with ONE bathroom! My wife and I currently live in a 750 sq ft. apartment and the lack of storage and our tiny kitchen with hardly any counter space to prepare meals (we can’t work in the kitchen simultaneously) has us clamoring for a house already. Doesn’t have to be a massive house, but at least 1,500-1,850 sq ft.
Kinda cheat.. since all three children are boys. lol... they get along really well.. bonus! We've learned to adapt... think out of the box and creatively storage wise. We utilize overhead space a lot. Wardrobe wise, I have the same set all year round. We also spend most of the day outside in the backyard even though its still just a 50x100 lot. We've created an area to eat, two seating areas, a couple small sheds, and a lounging swing (I take naps on it). I do most of the cooking and a lot of what I cook is grill (even during winter)... so that area is like an extension on the kitchen. We've also installed plenty of sail cloth shades for more comfort under the hot sun.
Yeah.. winters can be a challenge since you are coup'd up inside but for the most part, NJ has mild winters.
We've always been on the frugal side anyways.. She isn't a big spender. My childhood was during a time parents didn't have a lot of income. So when we decided to pass up on the nicer cars and nicer home etc... it wasn't all that difficult to accept the realities.
We laugh at the Tiny home shows on TV because broken to sqft per person, we are actually "Tiny-er".
Small home, close family.
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