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

To: David Jones who wrote (14572)	10/27/2003 7:39:40 PM
From: JBTFD	Read Replies (1) \| Respond to of 306849

I guess my point is that a builder could theoretically get a 100k lot and put a 50k home on it and sell it for maybe 220k but he wouldn't be able to get financing if this was his approach. The financing rules put the floor on how big the homes are, based on the cost of lots on the particular area. You can't build a smaller house and still get a construction loan. I think the rest of the mcmansion phenomenon follows from this. Floor area ratios put the top limit on how big a house can be, and thank God for that or they might be building big boxes from lot line to lot line that you sometimes see that were build in the old days. I know there are other economic reason why they build so big, but the reason they don't build small beyond a certain point is the financing rules. This was my origional point re: <<<But, as the epithet McMansion suggests, they’re just too big—for their lots, for their neighborhoods and for the number of people who actually live in them. And why do they keep getting bigger, when families are getting smaller? In 1970, the average new single-family house was 1,400 square feet; today it’s 2,300. >>>