In 8 years, your construction cost went up 2x, while your land cost went up 5x. Did construction costs increase at a constant 9% annually, due to tight labor markets, or was there a sudden jump in the last year due to hurricane demand effects?
Any permanent rise in cost of construction cost would lead to a permanent rise in the value of housing. The speculative element, and the artificially high price of land, which has risen despite any change in fundamentals (population, wages), will be eliminated.
So when the bubble bursts, perhaps we’ll be at a higher plateau? Or will construction costs decrease as the labor market weakens and the temporary hurricane effects dampen?
