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I've always been under the impression that the value of real estate for the most part is in the land, not the structure.
Comparing Triangle real estate to MA (where I came from), at first glance it appears that real estate is "cheaper" in the Triangle versus the Boston suburbs. For example a 3500sf new construction home in Cary may cost you $600k, where as in MA it will likely cost you 1M+ or more. However, lot sizes are generally larger in MA suburbs (quarter acre or more), whereas most new construction in Cary is on tiny postage stamp lots (5000-8000sf or so).
So assuming the value is in the land, I would think that pricing in the Triangle is close to on par with pricing in Boston suburbs, which doesn't really make the Triangle much of a bargain in comparison. I think many buyers look at the square footage of the structure only, which makes it seem like pricing here is much more "reasonable", but in reality they have a lesser investment because they have much less land which is where the value is.
Assuming most of the value is in the land, adjust the Cary house to the Burlington lot size, gets you a value of about 1.5M, more expensive.
Obviously there's going to be differences in finishes, land location, cost of materials/labor and all that. But am I way off here? In the long run won't these houses on tiny lots be a lesser investment than those on larger lots?
House we sold in MA
1960 Ranch. Finished basement (1993 sq ft including basement, could count sq ft since it was a walkout and not a bulkhead) 4 beds, 1.5 Baths, quarter acre lot. 43 miles from Boston, 17 miles from Providence. Tax assessed in 2019 for $384500 (we sold it in 8/2016 for 351K)
House we bought in Heritage
2007 build. ~3200 sq ft 4 Bed, 3 Bath, third of an acre lot 14 miles from Raleigh. Tax assessed in 2019 for 365K we paid 425K in 2017
I could never afford to live 14 miles from Boston in a house I’d want to live in. But I do remember when we sold our place in MA, 3/4 of the tax assessment was the land, with the last quarter being the “buildings”.
There is no such thing as a master planned community in MA, so I can’t do a true apple to Apple comp
No bargain here is true since in MA you have a MAJOR city with Transportation,sports, and one can debate a more welcoming state government especially with unemployment benefits.
I was just at Buckhorn In Apex where lot premiums are 30 to 35k for an area that floods to boot on top of 437k base price before design options....ok...
I could never afford to live 14 miles from Boston in a house I’d want to live in. But I do remember when we sold our place in MA, 3/4 of the tax assessment was the land, with the last quarter being the “buildings”.
But the question is, would you be able to afford it if it was on a 6000sf plot of land? Possibly.
Maybe? But I would never want to be that close to neighbors/that small of plot
What's weird too is that I don't think resales follow that same theory. You can get a 3000sf resale in on a quarter acre in Cary for far less than a 3000sf resale on a quarter acre in Burlington.
This leads me to believe that maybe there's an extreme premium for new construction in Cary/the Triangle, and people are paying way too much for their houses on tiny lots?
It's not just the purchase price that should be considered, it's yearly expenses like taxes, insurance and other comps. MA taxes are higher than NC, don't know about insurance. That would really be a good comparison apples to apples.
It's not just the purchase price that should be considered, it's yearly expenses like taxes, insurance and other comps. MA taxes are higher than NC, don't know about insurance. That would really be a good comparison apples to apples.
I'm really looking at just the value of the physical land and structure, not cost of living as a whole.
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