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  • December 29, 2007 at 1:57 PM #11351
    NeetaT
    Participant

    “Builders said they have already lowered prices on new homes to the point where they lose money on the price of construction. Some said they would rather hold onto the properties than slash prices further.”

    I don’t know much about the expense of building, but I assume they must be taking the price of the land they bought into consideration. I wonder if money lost on construction is made up in land value that may have appreciated since the builder bought. I guess what I’m trying to allude to is the disparity between the value of the house and the value of the land.

    December 29, 2007 at 3:23 PM #126144
    Bugs
    Participant

    I can answer this one. Land values are dropping like a rock right now. Other building costs are coming down too, but so far they aren’t coming down as fast.

    That’s just a matter of time, though. There are a lot of areas in the nation where the costs of materials never did get anywhere close to what they are here, and there’s no reason why the local pricing can’t get a lot closer to the costs in other areas.

    Yes, price declines do cut into the builders’ bottom lines, but those bottom lines were massively bloated back during the heyday. Those guys were marking up their options and upgards more than 300% of their costs. Those big 4×4 crew cab rigs they all drive didn’t materialize out of thin air.

    When profitability on these projects drop the developers tend to stop building. This is why very little gets built during a bust, and why the developers try to outdo each other with price increases during the booms.

    December 29, 2007 at 3:23 PM #126405
    Bugs
    Participant

    I can answer this one. Land values are dropping like a rock right now. Other building costs are coming down too, but so far they aren’t coming down as fast.

    That’s just a matter of time, though. There are a lot of areas in the nation where the costs of materials never did get anywhere close to what they are here, and there’s no reason why the local pricing can’t get a lot closer to the costs in other areas.

    Yes, price declines do cut into the builders’ bottom lines, but those bottom lines were massively bloated back during the heyday. Those guys were marking up their options and upgards more than 300% of their costs. Those big 4×4 crew cab rigs they all drive didn’t materialize out of thin air.

    When profitability on these projects drop the developers tend to stop building. This is why very little gets built during a bust, and why the developers try to outdo each other with price increases during the booms.

    December 29, 2007 at 3:23 PM #126379
    Bugs
    Participant

    I can answer this one. Land values are dropping like a rock right now. Other building costs are coming down too, but so far they aren’t coming down as fast.

    That’s just a matter of time, though. There are a lot of areas in the nation where the costs of materials never did get anywhere close to what they are here, and there’s no reason why the local pricing can’t get a lot closer to the costs in other areas.

    Yes, price declines do cut into the builders’ bottom lines, but those bottom lines were massively bloated back during the heyday. Those guys were marking up their options and upgards more than 300% of their costs. Those big 4×4 crew cab rigs they all drive didn’t materialize out of thin air.

    When profitability on these projects drop the developers tend to stop building. This is why very little gets built during a bust, and why the developers try to outdo each other with price increases during the booms.

    December 29, 2007 at 3:23 PM #126313
    Bugs
    Participant

    I can answer this one. Land values are dropping like a rock right now. Other building costs are coming down too, but so far they aren’t coming down as fast.

    That’s just a matter of time, though. There are a lot of areas in the nation where the costs of materials never did get anywhere close to what they are here, and there’s no reason why the local pricing can’t get a lot closer to the costs in other areas.

    Yes, price declines do cut into the builders’ bottom lines, but those bottom lines were massively bloated back during the heyday. Those guys were marking up their options and upgards more than 300% of their costs. Those big 4×4 crew cab rigs they all drive didn’t materialize out of thin air.

    When profitability on these projects drop the developers tend to stop building. This is why very little gets built during a bust, and why the developers try to outdo each other with price increases during the booms.

    December 29, 2007 at 3:23 PM #126301
    Bugs
    Participant

    I can answer this one. Land values are dropping like a rock right now. Other building costs are coming down too, but so far they aren’t coming down as fast.

    That’s just a matter of time, though. There are a lot of areas in the nation where the costs of materials never did get anywhere close to what they are here, and there’s no reason why the local pricing can’t get a lot closer to the costs in other areas.

    Yes, price declines do cut into the builders’ bottom lines, but those bottom lines were massively bloated back during the heyday. Those guys were marking up their options and upgards more than 300% of their costs. Those big 4×4 crew cab rigs they all drive didn’t materialize out of thin air.

    When profitability on these projects drop the developers tend to stop building. This is why very little gets built during a bust, and why the developers try to outdo each other with price increases during the booms.

    December 29, 2007 at 5:26 PM #126331
    Jumby
    Participant

    prices for supplies have gone down quite a bit lately…

    http://online.wsj.com/article/SB119578061831901674.html?mod=googlenews_wsj

    December 29, 2007 at 5:26 PM #126435
    Jumby
    Participant

    prices for supplies have gone down quite a bit lately…

    http://online.wsj.com/article/SB119578061831901674.html?mod=googlenews_wsj

    December 29, 2007 at 5:26 PM #126343
    Jumby
    Participant

    prices for supplies have gone down quite a bit lately…

    http://online.wsj.com/article/SB119578061831901674.html?mod=googlenews_wsj

    December 29, 2007 at 5:26 PM #126410
    Jumby
    Participant

    prices for supplies have gone down quite a bit lately…

    http://online.wsj.com/article/SB119578061831901674.html?mod=googlenews_wsj

    December 29, 2007 at 5:26 PM #126174
    Jumby
    Participant

    prices for supplies have gone down quite a bit lately…

    http://online.wsj.com/article/SB119578061831901674.html?mod=googlenews_wsj

    December 29, 2007 at 5:54 PM #126439
    pizzaman
    Participant

    And finished lots are down as much as 52%
    http://lansner.freedomblogging.com/2007/12/18/inland-empire-lot-prices-sliced-in-half/

    December 29, 2007 at 5:54 PM #126179
    pizzaman
    Participant

    And finished lots are down as much as 52%
    http://lansner.freedomblogging.com/2007/12/18/inland-empire-lot-prices-sliced-in-half/

    December 29, 2007 at 5:54 PM #126336
    pizzaman
    Participant

    And finished lots are down as much as 52%
    http://lansner.freedomblogging.com/2007/12/18/inland-empire-lot-prices-sliced-in-half/

    December 29, 2007 at 5:54 PM #126348
    pizzaman
    Participant

    And finished lots are down as much as 52%
    http://lansner.freedomblogging.com/2007/12/18/inland-empire-lot-prices-sliced-in-half/

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