The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Live2Sail who wrote (43747)	10/27/2005 7:50:54 PM
From: GraceZ	Read Replies (3) of 306849

However, is this a choice available to the Californian looking to buy a home right now? No one is compelled to make a transaction, in this country buying and selling is still completely voluntary. You aren't thinking about this the way a buyer thinks about it. Maybe they don't say, I want this house and I want it cheaper, at a discount. They say, this is what I can pay a month so if I have to pay more in taxes every month, then I have to buy a cheaper house. This effectively takes them out of the pool of buyers for the comparable house at the same price with higher taxes. This puts downward pressure on price. What you don't have as much is a choice which we make here on a regular basis, build vs. buy. If existing homes become too expensive, say someone asks a million for a 50 year old 1300 square foot rancher on a tiny lot, I can call up a custom builder and get a $125/sq ft quote on a comparable new home and then go buy a lot for $120k and beat the million dollar dump by $717,000. It is this reality that keeps existing housing cheaper in my neighborhood. It's not like land is any more scare there in Northern CA than it is in Maryland. I visit people all over the Bay area and I've never visited anyone who didn't live near large tracts of undeveloped land. I've spent lots of time hiking in the various "open space" areas all over CA. I ask people I know who are looking for houses out there all the time why they don't build considering everything they look at needs lots of work. They look at me like I'm crazy. For one, new construction is almost always cheaper and easier than a remodel (I've been involved with lots of both)....that is if new construction isn't saddled with fees, more restrictive regulations and other various government hurdles.

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