Viewing a single comment thread. View all comments

Dartmeth t1_j9a1qz9 wrote

Reply to comment by itsMalarky in Sorry to the NHer’s who wanted to stay! by 603ify

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.

17

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.

4

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.

1

itsMalarky t1_j9c1rj5 wrote

Makes sense --- Texas seems to love it's "McMansion" neighborhoods

2