The realtor in the OP doesn’t get it and will say whatever it takes to sell the house. The question isn’t “can you build it for that price?” The right question to ask is “can you get something comparable for that price – either by building it or by purchasing something else?” If the market for houses allows you to get something for much less than the replacement cost, it just means you should not spend the money to build. It doesn’t mean the house is a deal, as other houses could be even better deals. i.e. be sure to check comps.

There is some correlation between the replacement cost and the value of the house, and to some extent, the economics of the construction and housing markets do affect one another, but really for a given house, once built, the replacement cost is a sunk cost.

Lets take an example of two houses of the same size with the same number of bedrooms and bathrooms. One has a terrible layout, closed-off kitchen, isolated living rooms, hallways too large, rooms too small, etc. The other is properly designed with open kitchen. Same exact replacement cost. Differnt value.