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Strategies & Market Trends : SiliconInvestor All Stars Forum

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To: SouthFloridaGuy who wrote (1702)	6/27/2008 1:14:28 PM
From: John Vosilla	Read Replies (1) of 1718

'A combination of soaring global demand and high energy prices has caused construction material prices to explode for both commercial and residential builders. Construction costs have been increasing at more than twice the level of overall consumer prices, according to statistics from the Associated General Contractors of America. And prices for many building components – including steel, roofing materials and concrete – have grown even faster. "Costs are up most for products currently being used for nonresidential building and highway projects," said D'Ann Petersen, a business economist with the Federal Reserve Bank of Dallas. "Higher energy prices are pushing up production prices for many of these products. "In addition, raw materials prices continue to rise." For developers, the surge in pricing makes it hard to nail down the economics of a deal. ' LIG I've been a strong believer in this concept for the next cycle. The bears, even most of my friends on the stagflation board who think housing will be bad while gold or oil goes to a gazillion don't understand the components of a house drive the future value as long as local incomes are also rising. Most of the housing bulls are now so shellshocked even they think housing will not go up either for a very long time being fooled by the phoney credit juiced bubble earlier this decade.. talk about being the ultimate contrarians<g> check these almost new homes for under $75k..now I'm certain you can't build these homes for under $65 psf + the cost of putting in lot prep,roads and other infrastructure that are $20k+ as well as the cost of the land (lots were $85k at the top and now in the low teens in this current depression)and other soft costs like impact fees $7k+..you can do the math on what a rough estimate would be<g> realtor.com

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