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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Think4Yourself who wrote (76338)4/19/2007 10:06:51 AM
From: ChanceIsRead Replies (1) of 306849
 
>>>And still they build at much faster rates than they sell. Make up the loss on each house with volume?<<<

It may be the case - as Ara Hovnain suggested - that some builders are "poping up houses" because they can move the land and all of its carrying costs (especially if it is a quasi developed subdivision with new sewers, streets, etc vice raw land) more easily by building houses on the remaining unfinished lots. The losses might be smaller with the quick sale of what is a "losing home" than carrying out a few years (or decades) until the market begins to rise.

One wonders that if in the end the prosperity isn't biting the builders in the fanny. The bubble and high realized new home prices results in higher local taxes. In my experience in Northern Virginia, the tax is primarily on the land and not the improvements. So carrying raw or partly developed land has become proportionately more expensive.
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