Submitted by 603ify t3_116x5cg in newhampshire
itsMalarky t1_j994416 wrote
3 new builds on my street (fairly rural) JUST finished and I feel like they were too late. Cheapest is 650K and they've sat on the market for months now. It seems like some developers are getting screwed for trying to cash in on the market.
hardsoft t1_j997h2c wrote
The materials were probably so expensive when they built it they'll need a high price just to break even.
Lumpyyyyy t1_j9ae09l wrote
Oh well. That’s what they get for speculative home building.
itsMalarky t1_j998me9 wrote
Yeah.....kind of what I was thinking.
It was RIGHT during that insane period where material pricing was through the roof (mostly wood). Then we had 2 or 3 rate hikes.
Excellent_Affect4658 t1_j9ahcpt wrote
Ehhhh. We built an ADU for my parents during that time, and while we definitely paid a bunch extra for framing, and everyone fixated on that, framing is a very small portion of the cost of an actual house, so it doesn’t move the needle that much at the end of the day.
itsMalarky t1_j9aqb94 wrote
Yeah true. Not just wood. Everything. Family owns a construction company. Sure, framing is just a part of the equation. But that's not even all the wood you need (floor joists...etc). That also ignores the fact that Steel, copper and the labor to install it all went up as well. Conservative estimates would put the price increase of materials at least around 25-30% post-pandemic. Service prices are even higher.
I probably singled out wood above because of the FAST and FURIOUS memes people were posting about lumber trucks. But it's only part of the equation.
Assuming an ADU is an acronym for an in law apartment.
(Edit: a few words)
Dartmeth t1_j9a1qz9 wrote
The pool of people able to afford a 650k home is small. Smaller if they need to avoid high interest rates by purchasing with cash. For a long time developers have been building larger luxury homes because they are more profitable. Seems to me like the developers are not thinking of the market.
itsMalarky t1_j9adbzs wrote
these are not really "luxury homes" (both around 2500SQ Ft) but I totally agree.
One of the lots was subdivided for 2 homes (so it almost seems like the builder/developer might have been trying to maximize profits on the crappy 4Acre lot he overpaid for by cramming two houses onto it), and it definitely seems like they moved into one of them to cut their losses after 2 open houses and no "sale pending" sign.
I just haven't been curious enough to check the records.
IntelJoe t1_j9azlmf wrote
This is very subjective to a specific area, this statement may be 100% true in your area. But not all.
I wouldn't say luxury homes are more profitable, from what I saw working in real estate in Texas was that at 3% people that could afford a $400k+ home could not afford that same home above 4-5%.
What made homes more profitable in the Austin area was by building them very close in these tight knit neighborhoods that popped out of nowhere. Regardless if they were plain Jane or luxury type homes, they were built as cheaply as possible.
But most people are priced out by the now higher interest rates.
itsMalarky t1_j9c1rj5 wrote
Makes sense --- Texas seems to love it's "McMansion" neighborhoods
New_Restaurant_6093 t1_j9b0fir wrote
Gotta know when to hold ‘em, it’s a gamble. I don’t feel bad most of the builders I’ve seen are from out of state.
itsMalarky t1_j9b5b3c wrote
Haha yeah, I don't feelbad for them AT ALL either.
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