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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (14546)	10/27/2003 2:21:25 AM
From: JBTFD	Read Replies (2) \| Respond to of 306849

It is a factor for anyone who is financing their project. It ends up looking like a goose or egg thing, which came first. The reason the houses are so big is because of financing rules, so people in the market get conditioned to see large houses and don't want a small house. I do feel the financing rules are a causative factor, if not the only one. For example if you are in an area where a buildable lot is $100K. And the financing rules are that the land can be no more than 33% of the selling price. All of a sudden you have to build a house that will sell for $300,000. Or find another way to fund the project. I don't remember what the percentages are, but this is how it works, IMO.