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"One of the things I find about the market here in Jersey (and in Westchester also) is that one can look a house in the 700K range and they are HORRENDOUS. The on the other end of the spectrum, there are the new or remodeled homes that are new going for millions."
I agree, you have to look high around here. And it's difficult for ANYONE to get into a house-poor situation these days, especially if they mortgaged lately. We just moved into the price bracket in question with 20% down, NO debt, GREAT jobs, NO prior credit snafus of any kind, and at a 20-something percent income ratio (<40% is recommended) ... and it was like pulling teeth with the finance industry like it is. You'd think we were coming out of freaking Chapter 13.
By the way, my husband is in the energy industry and I'm in pharmaceuticals. Just normal people who've moved up the real estate ladder. I'm from Birmingham, AL, and there, $700K would buy you a house overlooking a Robert Trent Jones golf course. It all depends on where in the country you are.
We had the same experience. At the 11th hour we needed all kinds of tax info., pay stubs, and other documents that had not been previously required. It was mostly a PITA, that could have totally been avoided, especially given dh had called the bank every few weeks during the 16 months we were in process to make sure everything was still ago, given the state of the industry . The year before, when doing our approvals, all the banks were like, "[a]re you sure you don't need more? Let us know how much you need, and it'll be done."
They have to continue to build huge McMansions... the cost of a buildable lot is ridiculous anymore..if a builder wants to make anything on the home, he has to go large! Start finding buildable lots for under 100K and then you'll start to see smaller homes.
This is how bad information gets passed around, when poeple dont know what they are talking about but try to pretend
You'll see alot of these big homes due mostly in part because of the township requirements.
I assure you that as someone that works closely with builders, its in there best interest to be able to build as many homes in an allocated area
That would be logical and make more sense , dont you think?
However the reality of that, is township who oversee property sales and usage, most likely will not allow that to happen , of course this varies area to area. I recently had a builder purchase over a 40 acre property, that was only allowed to build 11 homes. you bet those homes were big, but they had to cover the property size.
This is how bad information gets passed around, when poeple dont know what they are talking about but try to pretend
You'll see alot of these big homes due mostly in part because of the township requirements.
I assure you that as someone that works closely with builders, its in there best interest to be able to build as many homes in an allocated area
That would be logical and make more sense , dont you think?
However the reality of that, is township who oversee property sales and usage, most likely will not allow that to happen , of course this varies area to area. I recently had a builder purchase over a 40 acre property, that was only allowed to build 11 homes. you bet those homes were big, but they had to cover the property size.
Hummm...are you agreeing or being an a**hole? 40 acres..11 homes - had to build huge homes to cover the lot size in order to satisfy the township requirements? Or recoop the cost of the 40 acre parcel plus engineering costs in each home sold? I have also worked for builders...and did alot of residential engineering and planning work... in NJ not NY. There's a maximum lot coverage limit....not a minimum.
This is how bad information gets passed around, when poeple dont know what they are talking about but try to pretend
You'll see alot of these big homes due mostly in part because of the township requirements.
I assure you that as someone that works closely with builders, its in there best interest to be able to build as many homes in an allocated area
That would be logical and make more sense , dont you think?
However the reality of that, is township who oversee property sales and usage, most likely will not allow that to happen , of course this varies area to area. I recently had a builder purchase over a 40 acre property, that was only allowed to build 11 homes. you bet those homes were big, but they had to cover the property size.
You are the one that doesn't know what they are talking about.
Hummm...are you agreeing or being an a**hole? 40 acres..11 homes - had to build huge homes to cover the lot size in order to satisfy the township requirements? Or recoop the cost of the 40 acre parcel plus engineering costs in each home sold? I have also worked for builders...and did alot of residential engineering and planning work... in NJ not NY. There's a maximum lot coverage limit....not a minimum.
Sorry, let me apologize. When I wrote that, I wasnt trying to insult you.
Theres a direct relationship to what builders can build relative to what Townships allow. and the property size
But because the township doesnt allow the # of homes to be built, the builders have no choice regardless of the land size to go big.
In most cases, the land size is fairy large so the other factor may also be the need to recoop those purchases, but its not the primary reason. When builders have interest to purchase land, they propose the maximum amount of homes they would like to build. Almost every proposal gets modified and lowered to what the builder wants, as well as the relative size or models of homes.
The other scenario is to buy cheap land, or smaller lots but risk not being able to sell, because most of those are not in prime locations.
I appreciate for the others who had the time to respond that I DONT KNOW WHAT I AM TALKING ABOUT, to perhaps share your insight. If im wrong, then tell me whats right.
But because the township doesnt allow the # of homes to be built, the builders have no choice regardless of the land size to go big.
Quantity of homes is based on quantity of land and any rules/regulations by the township. If they have (just for example) 1 acre, and the township ordinance states 30% must be land, then .7 acres become house space. They can jam more rooms into the house by taking it to the maximum level, and push a higher price point.
Quote:
Originally Posted by nyrz
In most cases, the land size is fairy large so the other factor may also be the need to recoop those purchases, but its not the primary reason.
Quote:
Originally Posted by nyrz
The other scenario is to buy cheap land, or smaller lots but risk not being able to sell, because most of those are not in prime locations.
They make single large land purchases due to expense. When you are running truckloads of 2x4's, greenboard, etc., one large job site is cheaper for shipping than many smaller sites.
The primary reason is, and always will be, profit.
Quote:
Originally Posted by nyrz
When builders have interest to purchase land, they propose the maximum amount of homes they would like to build. Almost every proposal gets modified and lowered to what the builder wants, as well as the relative size or models of homes.
The builder wants the maximum number of homes to be built, or a combination of homes and townhomes, dependent upon how much can be crammed in to the location. Same reasons as above.
Reductions happen due to township ordinances, follow up requirements, zoning regulations, support requirements (the infrastructure required to accommodate the additional homes and people), etc.
Township requirements make homes *smaller*, not larger. As someone who has worked very closely with a builder, as this is kind've what I do, it pays to build the most large homes because you get more (quantity) of more (size) dollars coming in. 2 4500 sq ft homes are definitely worth more to a builder than one 7000sq ft home... but if they can cram in 3 4000 sq ft homes on smaller lots, or bring 2 4500 sq ft designs up to 4800 or 5000 sq ft, you can damn well bet thats what will happen.
Money makes money The secret is being part of a big family 10 adults to be exact we all chime in 600 a month the math goes on... The latte factor is so small but so true make your money work.
Most of them Can't or are house poor. They don't take fancy vacations and say they can't afford the gas. Even though my husband is a Senior Vice President, I would never take a mortgage that high, or use a great deal of my disposible cash.
The house I bought here was less than I received for the house I sold, and also almost double in size.
I live below my means, cars and college for daughter get paid in cash. I have no debt. My only loan is a low mortgage that I took for a tax deduction.
Diane G
What you just said is very true and as far as your living choice, you are one of the few. Sadly today, people are in the "live in the now" mode of lifestyle and they spend whatever credit they have and then end up in debt. In my old development a gentlemen purchased a home about 10 years ago new and then just kept taking the equity out of the house. Now he is over $500,000 in debt on a $600,000 home!!!!
People who buy 700k+ homes are generally not taking out 700k+ mortgages. Certainly not now, given the fall of the housing market. Banks are highly risk averse. (And if someone is borrowing that amount of money on a million or multi-million dollar home, and have been approved to do so in this market, he/she isn't house poor.)
That could not be further from the truth. I have clients purchasing these home and are still only putting 10 or 20% down and finanicing the rest. You would think they would learn but as long as they can prove they could afford the mortgage, they can EASILY get it. I just got off the phone with my mortgage rep for a client a few days ago and we were talking about a $650,000 purchase price and the client only wanted to put down 5%, and the bank approved him! Yes the qualification process is harder to get a loan now, but as long as you have the income and credit, you can still get one with little effort.
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At the 11th hour we needed all kinds of tax info., pay stubs, and other documents that had not been previously required. It was mostly a PITA, that could have totally been avoided, especially given dh had called the bank every few weeks during the 16 months we were in process to make sure everything was still ago, given the state of the industry 
. The year before, when doing our approvals, all the banks were like, "[a]re you sure you don't need more? Let us know how much you need, and it'll be done."
