Stucco said:
The market has already self-corrected. Is there an issue now? Besides the fact that we are going to have some people upside-down in a few years that overpaid due to lack of market inventory.
Slocum on a mobile said:
It will be interesting to see what happens when the local companies can't get folks to accept their positions because the housing is more expensive than Houston.
$110 max on construction not including land, so another $30 to $35 in land to come in around $140 per foot. These ~3500 square foot houses selling for $650,000 to $700,000 right now have nothing more in them than the same product you can buy now in suburban Dallas and Houston for $525,000 to $550,000.chrisfield said:
So those builders are making $225k on a $555k house? Come on, there's absolutely no way.
SARATOGA said:
Affordable housing isn't BUILT, it is FOUND.
Meaning if you can't afford to live somewhere, move to somewhere you can afford.
I'm always amazed by people in urban areas complaining about rental prices (New York, Boston, Chicago, California) - if you can't afford to live there, move to somewhere else. I bet rent is real cheap in Cleveland or Des Moine or Milwaukee.
chrisfield said:
So those builders are making $225k on a $555k house? Come on, there's absolutely no way.
My land cost is off? I'm attributing $35 in land to a 3500 foot home. Are you telling me that lots cannot be had for $122,000 in Indian Lakes? I know they can be. I'm in the business and have looked at them as recently as 2 days ago. My land cost is not "off". These builders that are actually paying $140 to $150 a foot to build a home do not have control of their subs and they are probably not good businessmen. I know several established builders that are making really good money on their builds and are still building homes for $95 to $105 a foot construction only. I'm not a realtor, but I am in the construction business locally. I'm not just shooting from the hip here. I'm also not wishing any ill will on any builder that makes as much margin as they can on a home. It's supply and demand and it is capitalism.txgardengirl said:
Rafter - your land cost is way off.
As a side note, in real estate we normally estimate a home to cost about 4x the lot price. Lots in Indian Lakes and the new section of Pebble are going for over $100k. In Castlegate 2 - the small section with 55' foot lots - those lots are $60-80k. You're seeing an increase in multiple level homes to offset the land space and keep the $/sf down.
I've sold quite a few of the homes that you call falsely inflated and seen the bottom line of what the builder walks away with. If it was $100k plus they would be throwing them up a lot faster!
With the lack of available land in CSISD (not College Station, but the school district), prices will remain high.
All of that for $530K and the lot? Sounds like a great deal!RafterAg223 said:
I don't disagree that their are builders that are making somewhat slim margins even at these prices. But there are quite a few very established ones out there who have gotten really aggressive in the subcontractor market, us included. We are 80% commercial, but we use a lot of the same subs as the residential guys. If subs around here don't want to play ball at a reasonable level, we go find ones that will in markets like Houston. Being budget conscious and shopping around does pay dividends in a pretty big way. There is a lot of money to be saved when you start looking around at concrete, framing labor, drywall etc. And there is no sacrifice in quality if you pick the right ones.
We have a new individual coming in to our company that is looking for a ~3500 to ~3600 foot home in the $610k range max. After running comps at $180 to $197 a foot on recent sold listings, we decided he can buy a lot in IL and we will build him the exact same product all in at ~$530,000, lot included. This will include foam insulation, quality hand scraped flooring, trane HVAC system, double stage crown molding, premium vinyl low-e windows, commercial grade appliances, built in outdoor kitchen space on the patio, and everything else you are seeing on most of these builder spec homes.