[quote=CA renter]Land prices would come down if end buyers refuse to pay the high prices for newly-built homes. The market doesn’t exist in a vacuum, and prices don’t levitate all by themselves. The reason land owners can charge these prices (to developers/builders) is because buyers are willing to pay the high prices for the homes.
We are not “running out of land” at all. Just drive 30 minutes in almost any direction, and you’ll see nothing but land. Lots and lots and lots of land in California. It’s amazing how much empty land there is, actually.
There is an artificial scarcity because certain developers/builders have been allowed to hoard land. There is a perceived scarcity of land, not a real one.[/quote]
Assuming arguendo that what you say is true, CAR, and this available land is not an estuary, a wildlife sanctuary, part of a military installation, an old dump, or rocky hills, do you think we need to pipe in MORE water to build yet MORE exurbs? Do you think it is prudent to encourage MORE urban sprawl when there is PLENTY of resale housing available to buy? Should we create MORE CFD’s so we can charge all these new buyers MELLO ROOS for 30-40 years when all our services are being cut back and we may be unable to staff these areas with police and fire services, etc? Do you think our city and county offices and especially courthouses should be able to serve thousands more people when they are already so overwhelmed that they can’t even report to the DMV in a timely manner that a traffic ticket was actually dismissed?
I think not. Now, when building is virtually at a standstill, it’s time to stop and rethink this whole idea of why SD needs to be able to accommodate everyone who wants to be here with NEW CONSTRUCTION for them to move into! Talk about depressing the market further. Isn’t there already several months worth of resale inventory on the market at present?
[quote=CA renter]I do agree with you about first-time buyers not need to buy brand-new homes, but realize that some first-time buyers are actually older, and are just now looking to buy after spending years in college and in building their careers. They should not have to buy worn-down junk in the barrio just because they are first-time buyers. There are many different types of first-time buyers out there.[/quote]
I stated above that first time buyers with little down (meaning <20%) must accept what is avail in the resale market, rent or move away. If a first-time buyer has =>20% down and can qualify for a larger mortgage, then by all means, they should buy what they are qualified for, new or resale. Whether or not a first-time buyer has spent “several years in college” really has nothing to do with their qualifications. Their downpayment amount, regular and continuing income and credit rating have everything to do with it.
It is not cost-effective for a builder to build a stripped-down “starter home” on an inferior exurb lot that costs the same and pay original permitting fees that cost the same no matter what they build on it. Think about it.
