The land and the cost structure in California support high prices. In Texas builders can sell profitably at $80/sf so that’s proof that construction costs aren’t the culprit.
It’s all the associated costs/mark-ups that lead to high prices. It takes years for a developer to get land “entitled” for development and he wants compensation for his efforts.
If buyers simply refuse to buy in MR and HOA areas, then developers have 2 options.
1) raise prices to make up for the difference.
2) eat the cost and live with lower profit margins. They most likely have to choose option 2 during downturns where buyers are hard to come by.
Developers have to keep on selling to earn a living so if buyers are picky, then builders have to lower margins to get products moving.
I think that homeowners can get together to dissolve an HOA just like stockholders can dissolve a corporation.
About Mello Roos, once the bonds have been issued, they have to be paid back, either immediately or over time. Another thread discussed the fact that the builder can pay the Mello Roos on behalf of the buyers.
