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

To: Don Earl who wrote (59817)8/12/2006 11:47:52 AM
From: John VosillaRead Replies (1) | Respond to of 306849
 
I think you are both right from your given perspectives.

Many costs going through the roof the last few years. Many commodities, labor, insurance, impact fees ect(cost of land development), cost of capital on construction loans, cost of transporting.

National builder volume discount, pricing power and economy of scale gives them an incredible advantage these days (think WalMart versus small mom and pop). Home Depot and Lowes built higher margins temporarily due to housing mania and homeowners flush with cash. More and more import of materials and supplies from China as a deflationary factor on certain items.

Bad news for anyone needing to compete against national builders never more prevalent than this downturn.



To: Don Earl who wrote (59817)8/12/2006 4:18:07 PM
From: Elroy JetsonRespond to of 306849
 
I'm familiar with the building costs paid by large integrated builders.

But I'm not at all familiar with your world of the individual contractor.

So when you say your costs may have doubled in the the past two years, I'm not disputing that. But costs for large home builders have not.

You have to realize that its a mistake for you to extrapolate your costs for building materials, building one house at a time, to the costs experienced by large integrated builders.
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