OT: Iceland

Page 5 of 8  
On 3/8/2010 2:16 PM, Morris Dovey wrote:

How does "builder greed" manifest itself in the overall price of houses in an area?
Inquiring minds, and all that ... I need some practice in that regard.
--
www.e-woodshop.net
Last update: 10/22/08
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 3/8/2010 2:42 PM, Swingman wrote:

It showed up in a lot of ways here - most notably in large land grabs along our relatively few arterial highways. In some cases square miles of farmland were bought for prices on the order of $3K/acre and divided up into 1/2 acre $60K (minimum) building plots. A number of the builders then claimed the re-sale price of the land as assets and borrowed on that to buy still more land. It only came to my attention when I went looking for land to build a new shop.
Yes, people could still shop for land - provided they were willing to live 7-10 miles from a paved arterial - but that's neither safe nor sane here if there's a need to commute 15 miles to an office job in the city.
The construction pace appears to have been pushed beyond what could be managed/supervised and even inspected properly. One (I'm told typical) example of which I have some personal knowledge is a friend's new home in which the builder "forgot" to insulate one of the exterior walls, and no one noticed until my friend and his family spent their first winter in the house. You build houses - tell me how that happens.

Karl, I don't think you're made that way - and these aren't the kinds of practices either you or your customers need.
I don't usually pay a lot of attention to what's going on in the construction business. I probably should, but my time and attention is fairly well eaten up with trying to improve solar technologies. You might be able to get a better glimpse of some of this by Googling on Regency Builders in Des Moines and reading. It's very likely to make more sense to you than to a guy who's not in the trade.
--
Morris Dovey
DeSoto Solar
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 3/8/2010 4:23 PM, Morris Dovey wrote:

I'm not maintaining that there was not plenty of greed to go around, nor trying to rag you ... that said, land, material and labor are the cost elements factored into determining the initial asking price of a spec home (marketing to a lesser extent).
But, without sufficient demand, which ultimately establishes the actual "market value" via the final sales transaction, even the sharpest of practices above are all for naught in setting an average price of real estate in a regional sense.
So what we have here are the unprincipled, from builder/speculators, bankers, real estate agents, to taxing authorities responding to pent up demand in the good old American way, resulting in the necessary embracing of the even older, precursor concept of "caveat emptor". :)

As well you already know ... lack of supervision by unprincipled speculators (not necessarily "builders" in the professional sense of the term), coupled with a mostly unskilled labor force that requires lots of same.

My point is/was that demand, generally and IME, has a much higher effect on the true cost of real estate than greed on the builder/speculator's part, no matter how unprincipled.
AAMOF, folks would be surprised to find that the margin on the average spec home in the best of areas is generally less than 10% no matter how sharp the operator.
Custom homes, with lots and lots of "change orders", are where the "ching ching" comes into play. :)
--
www.e-woodshop.net
Last update: 10/22/08
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Mon, 08 Mar 2010 14:42:11 -0600, the infamous Swingman

The area is full of $400k homes and the builder decided to build a $1M home there (or $675k home. It cost him $100k more.) Happens all the time, and the houses sit vacant for a whole long time until they sell for just a bit over the normal price for the area.
I take it that you've never done that.(?) I haven't, either. I'm small potatoes. ;)
-- Stay centered by accepting whatever you are doing. This is the ultimate. -- Chuang-tzu
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 3/8/2010 11:20 PM, Larry Jaques wrote:

That's not greed, that's stupidity.
--
www.e-woodshop.net
Last update: 10/22/08
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Tue, 09 Mar 2010 07:57:04 -0600, the infamous Swingman

Choose C - Both of the above.
-- Stay centered by accepting whatever you are doing. This is the ultimate. -- Chuang-tzu
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Government mandates do cost the developer/builder a third (or more) of the house price. In Vermont it was more like half. A developer had $100K in a lot before the first shovel saw light of day. Of course the builder isn't going to put a $100K house on a $100K lot.
Revenue wouldn't need to increase if they didn't spend more. They wanted to spend more without raising the "mil" rate - another invisible tax. ...until the market goes down.

Most, perhaps not, but a significant number do. I'd like to live on a lake too. Maybe someday soon (when I really retire ;-).

Where? California? I've heard this argument everywhere I've lived.

I should have explained better... The "mess" wasn't anything to do with Des Moines, rather the employer screwed everything up after the interview trip out there. Of course, if I had taken the job there I would have been moving out there during the middle of the floods.

Indeed they are. College loans are another government-caused mess. The whole purpose of loans are to drive the cost of education UP. Obama wants more.

That's certainly not my position. However, there is no way a new home can be built today for $100K in many places, mostly because of government regulations (again, not saying that all are bad). Discounting places like NYC and SF, where there isn't enough land for the population (and this isn't totally out of government's hands), a major reason for high housing costs is because of government intervention.
Small houses can still be had for $100K in many areas. There is nothing that says that a starter house has to be a new one, though I've seen new ones in the low-middle $100s here.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

There are some super-sweet deals in Detroit MI
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

...and Rochester NY. If you consider the average salary, perhaps not. Seriously, that's one of the bigger factors in home prices, the other being *government*.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 3/8/2010 2:54 PM, snipped-for-privacy@gmail.com wrote:

They can here, too, but there aren't enough to come anywhere close to filling the need.
I've also seen $1 homes in Des Moines, but the number of people who can afford to buy one to live in is astonishingly small.
--
Morris Dovey
DeSoto Solar
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Hmm. Something funny amount that. I'd think quite a few could affort $1 homes if they could find them :-)
I've heard that you can get good deals for $75k in certain parts of Riverside County, California.
scott
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 08 Mar 2010 22:45:54 GMT, snipped-for-privacy@slp53.sl.home (Scott Lurndal) wrote:

...and pay the taxes? I think the point was the cost of bringing them up to livable status, though.

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

If they're (still) on the market, they're filling the "need". ;-)

Different issue.
I did a quick search of realtor.com and found a number homes (40), several newish looking, in the $100K-$135K range, here. Taxes should be in the $700/yr range, too. I'd say that was fairly affordable housing. They also show 392 in Des Moines in that range. I was only there for a few days interviewing so of course I don't know the area well enough to comment on neighborhoods.
One example of a newish looking house in Des Moines: http://www.realtor.com/realestateandhomes-detail/18-E-Lally-St_Des-Moines_IA_50315_1113945766
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 3/8/2010 5:27 PM, snipped-for-privacy@att.bizzzzzzzzzzzz wrote:

http://www.realtor.com/realestateandhomes-detail/18-E-Lally-St_Des-Moines_IA_50315_1113945766 That's exactly what Des Moines and surrounding communities need more of. Des Moines is the largest employment center in the state (probably followed by Cedar Rapids). Now let's add the graduates of the University of Iowa (~30,000 students), Iowa State University (~20,000 students) and the University of Northern Iowa (~10,000 students) and guess that 15,000 of those 60,000 will enter the work force every year. Most will not return to a family farm. That guess is probably a little high, but the difference can be more than made up by young people who went into trades after high school and can now afford a starter home.
Most of those 15,000 will be looking at the ~400 homes you tallied - and the result will be (has been) that most will relocate out of the state. Housing is not the only reason, to be sure, but it is a significant factor.
--
Morris Dovey
DeSoto Solar
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 3/8/2010 6:41 PM, Morris Dovey wrote:

And therein lies one of the big contributors to higher housing prices ... the real estate industry, working on a commission basis.
--
www.e-woodshop.net
Last update: 10/22/08
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Not just the commission; the jacking up of the prices is mostly driven by the seller wanting a great price. The agent then runs with that. It is not in their interest to price themselves out of the market. It's capitalism at its self-regulating best.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 3/8/2010 6:58 PM, Robatoy wrote:

They are, for the most part, parasites on the industry body ... I've learned to loath the breed.
I can't tell you how many times I've witnessed real estate agents literally pull a prospective buyer out of a smaller home in favor of a higher priced, larger one when it was apparent to everyone that it contrary to the best interest of the buyer.
Find one allied with a builder in a hot neighborhood, and you've got a big problem with conflict of interest when it comes to pricing to the detriment of all concerned, and it's a very common collusion.
And, like lawyers, they've managed to convince the sheeple that the "service" they provide is so essential you can't buy or sell a house without them ... and I'd prefer to deal with a lawyer to tell the truth.
--
www.e-woodshop.net
Last update: 10/22/08
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
In East King Co east of Seattle in Wash. State its been interesting to watch how the govermnet gets in bed with the big developers and fights the small spec builders. They think they are doing well getting the develpers to put in the infrastructure and upgrade the roads in front of their 1500 home developement. Locally the county government was busted for falsifying traffic studies and instead of stopping the project they got the state to change the growth manegment act. Then the outlying suburbs as cities start developing like crazy as they don't have to show jobs to match houses and all of a sudden the county and state don't understand why they have to build new roads. In the midst of all this the small guy down the road who wants to subdivide 30 acres into 6 five acre parcels is told no as the infrastructure isn't in place. Seems to me it worked pretty well until they let the big guys start doing mega developements. Now the schools, and water districts are all trying to keep up.
Mike M

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Sounds all too familiar. Now throw in the Greeniacs and the subdividing of 30 acres into 6 lots become VERY expensive, My business puts me in touch with a lot of people who build, reno, design, sell homes. If you're subdividing, you are pretty much out in the county. That gives you some options: you run water, sewer and electrical to each lot (seems fair enough), but you need environmental impact studies, doubly so if you opt for the more common septic systems. So even if the land was free, you'll have $50,000 into each lot before you even start. $ 20K of which is nothing but bullshit lining the coffers of the local politicians ("it's for the children's health") who in turn won't use any of that money to develop (roads, bridges, the stuff of which you speak) the area where the money came from, but instead put a nice seawall where a few million dollar homes are located.
I know who's who in this county of 150.000 people, I will see a builder, county engineer, lawyer, council man and real estate agent having breakfast, taking combined tropical cruises and their sons and daughters knocking each other up. That type of animal has always been in bed together (sometimes literally) but there is NO corruption, just ask them, after all, this is Canada, that sort of thing never happens.... *feeling a bit queezee now, thinking I'm going to hurl*
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Tue, 09 Mar 2010 06:04:11 -0800, Robatoy wrote:

But almost everyone says "my lawyer/doctor/mechanic/etc. is great - it's all those other @#!$ that give the job a bad name"
--
Intelligence is an experiment that failed - G. B. Shaw

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Related Threads

    HomeOwnersHub.com is a website for homeowners and building and maintenance pros. It is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.