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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 (59152)	8/5/2006 3:41:52 AM
From: Don Earl	Read Replies (1) \| Respond to of 306849

RE: "I'm sorry to hear that your costs were so high when you built a home. This is one of the main attractions of homes built by large integrated home builders, much lower cost for the same product." It's a safe bet we're not talking about the same product. I could build junk for less money, but I'm not interested in building junk. RE: "I know what the costs for large builders are, and they are nothing similar to those you have experienced." I don't see you quoting any numbers. From plans, permits and utilities, to carpet, cabinets and landscaping, what do you think it costs to build a home with quality materials? RE: "It is inexperienced builders like yourself who create a price umbrella which supports wide profit margins for the major home builders." Nonsense. It took me three days to sell my last house going into the market heads up against local spec builders at their price point. An owner builder has absolutely no overhead. No office space. No phones to answer. No bonds to post. No licenses to buy. No liability insurance or workman's comp. No Yellow Pages or advertising. Zip. Zero. Nadda. If you live in the house for two years, you don't even pay capital gains. Even assuming deep discounts on materials from wholesale pricing, the big outfits can't come close to what a competent owner builder can do. Plus they're at the mercy of $15 an hour grunts who could give a rip about quality. The big outfits stay afloat through quick turns and minimum quality, not from high margins, and any perceived break they get on pricing gets chewed up in overhead. You can't make a piece of string longer by cutting off one end and tying it to the other. RE: "The dramatic three-fold increase in home prices over the past eight years..." Get real!!! Nothing of the sort is taking place except in tiny little pocket markets, and even in the hottest markets, 300% is absurd unless you're talking about a major remodel that isn't being added to the cost basis.