Housing Prices Near Bottom according to MotleyFool

[kev374]

How is the cost of building a house in Texas that much different than building a house in Los Angeles? And if it’s not much different then how come they can sell brand new construction in Houston for $180k and here that same place is $650k. That cost argument doesn’t add up for SoCal being so high!

[surveyor]

Time

A house in Texas costs less because Texas does not have stringent land requirements like California. A subdivision in Texas will take a year from conception to finished construction. The same process in California not only costs more in fees and requirements and environmental studies, but it also takes FOUR to FIVE years.

I hope that answers your question.

edit: although I should note that this fact does not in any way justify current prices of houses…

[surveyor]

Time

A house in Texas costs less because Texas does not have stringent land requirements like California. A subdivision in Texas will take a year from conception to finished construction. The same process in California not only costs more in fees and requirements and environmental studies, but it also takes FOUR to FIVE years.

I hope that answers your question.

edit: although I should note that this fact does not in any way justify current prices of houses…

[surveyor]

Time

A house in Texas costs less because Texas does not have stringent land requirements like California. A subdivision in Texas will take a year from conception to finished construction. The same process in California not only costs more in fees and requirements and environmental studies, but it also takes FOUR to FIVE years.

I hope that answers your question.

edit: although I should note that this fact does not in any way justify current prices of houses…

[surveyor]

Time

A house in Texas costs less because Texas does not have stringent land requirements like California. A subdivision in Texas will take a year from conception to finished construction. The same process in California not only costs more in fees and requirements and environmental studies, but it also takes FOUR to FIVE years.

I hope that answers your question.

edit: although I should note that this fact does not in any way justify current prices of houses…

[surveyor]

Time

A house in Texas costs less because Texas does not have stringent land requirements like California. A subdivision in Texas will take a year from conception to finished construction. The same process in California not only costs more in fees and requirements and environmental studies, but it also takes FOUR to FIVE years.

I hope that answers your question.

edit: although I should note that this fact does not in any way justify current prices of houses…

[Bugs]

Most areas of Texas have hard costs that are about 10% below the national average, whereas most of Southern California (excluding coastal communities) have costs that are about 18% higher.

Part of the differences in costs are in these so-called indirect costs. Much of Texas is notoriously lenient on land planning issues, which is how you end up with oil refineries being located adjacent to residential subdivisions.

The entitlement process in California absolutely does add to the construction costs. And like I said before, those costs aren’t going away.

Part of that is due to the limitations of Prop 13. Since the local governments can’t significantly raise property taxes to pay for infrastucture it all has to be paid up front, either in the form of the additional fees that get rolled into the construction costs or in the form of Mello-Roos.

That’s why property tax rates in Texas (and other areas) are double what they are here. So while you only pay $200k for the house, you’re also paying $4,800/year in property taxes. That adds up after a while. $200/month in additional property taxes is equivalent to making an additional mortgage payment on another $30,000, so that right there makes your $200k home purchase in Texas the equivalent of a $230k home here in California.

Lastly, there’s also the workman comp premiums and other labor-related costs other than wages. Those aren’t going away either.

So yeah, there’s lots of good reasons why new construction in California will always be higher than in Texas. But there’s no real reason for it to be double or triple, and there never was. The only reason it was higher was because people were willing to pay more.

[Bugs]

Most areas of Texas have hard costs that are about 10% below the national average, whereas most of Southern California (excluding coastal communities) have costs that are about 18% higher.

Part of the differences in costs are in these so-called indirect costs. Much of Texas is notoriously lenient on land planning issues, which is how you end up with oil refineries being located adjacent to residential subdivisions.

The entitlement process in California absolutely does add to the construction costs. And like I said before, those costs aren’t going away.

Part of that is due to the limitations of Prop 13. Since the local governments can’t significantly raise property taxes to pay for infrastucture it all has to be paid up front, either in the form of the additional fees that get rolled into the construction costs or in the form of Mello-Roos.

That’s why property tax rates in Texas (and other areas) are double what they are here. So while you only pay $200k for the house, you’re also paying $4,800/year in property taxes. That adds up after a while. $200/month in additional property taxes is equivalent to making an additional mortgage payment on another $30,000, so that right there makes your $200k home purchase in Texas the equivalent of a $230k home here in California.

Lastly, there’s also the workman comp premiums and other labor-related costs other than wages. Those aren’t going away either.

So yeah, there’s lots of good reasons why new construction in California will always be higher than in Texas. But there’s no real reason for it to be double or triple, and there never was. The only reason it was higher was because people were willing to pay more.

[Bugs]

Most areas of Texas have hard costs that are about 10% below the national average, whereas most of Southern California (excluding coastal communities) have costs that are about 18% higher.

Part of the differences in costs are in these so-called indirect costs. Much of Texas is notoriously lenient on land planning issues, which is how you end up with oil refineries being located adjacent to residential subdivisions.

The entitlement process in California absolutely does add to the construction costs. And like I said before, those costs aren’t going away.

Part of that is due to the limitations of Prop 13. Since the local governments can’t significantly raise property taxes to pay for infrastucture it all has to be paid up front, either in the form of the additional fees that get rolled into the construction costs or in the form of Mello-Roos.

That’s why property tax rates in Texas (and other areas) are double what they are here. So while you only pay $200k for the house, you’re also paying $4,800/year in property taxes. That adds up after a while. $200/month in additional property taxes is equivalent to making an additional mortgage payment on another $30,000, so that right there makes your $200k home purchase in Texas the equivalent of a $230k home here in California.

Lastly, there’s also the workman comp premiums and other labor-related costs other than wages. Those aren’t going away either.

So yeah, there’s lots of good reasons why new construction in California will always be higher than in Texas. But there’s no real reason for it to be double or triple, and there never was. The only reason it was higher was because people were willing to pay more.

[Bugs]

Most areas of Texas have hard costs that are about 10% below the national average, whereas most of Southern California (excluding coastal communities) have costs that are about 18% higher.

Part of the differences in costs are in these so-called indirect costs. Much of Texas is notoriously lenient on land planning issues, which is how you end up with oil refineries being located adjacent to residential subdivisions.

The entitlement process in California absolutely does add to the construction costs. And like I said before, those costs aren’t going away.

Part of that is due to the limitations of Prop 13. Since the local governments can’t significantly raise property taxes to pay for infrastucture it all has to be paid up front, either in the form of the additional fees that get rolled into the construction costs or in the form of Mello-Roos.

That’s why property tax rates in Texas (and other areas) are double what they are here. So while you only pay $200k for the house, you’re also paying $4,800/year in property taxes. That adds up after a while. $200/month in additional property taxes is equivalent to making an additional mortgage payment on another $30,000, so that right there makes your $200k home purchase in Texas the equivalent of a $230k home here in California.

Lastly, there’s also the workman comp premiums and other labor-related costs other than wages. Those aren’t going away either.

So yeah, there’s lots of good reasons why new construction in California will always be higher than in Texas. But there’s no real reason for it to be double or triple, and there never was. The only reason it was higher was because people were willing to pay more.

[Bugs]

Most areas of Texas have hard costs that are about 10% below the national average, whereas most of Southern California (excluding coastal communities) have costs that are about 18% higher.

Part of the differences in costs are in these so-called indirect costs. Much of Texas is notoriously lenient on land planning issues, which is how you end up with oil refineries being located adjacent to residential subdivisions.

The entitlement process in California absolutely does add to the construction costs. And like I said before, those costs aren’t going away.

Part of that is due to the limitations of Prop 13. Since the local governments can’t significantly raise property taxes to pay for infrastucture it all has to be paid up front, either in the form of the additional fees that get rolled into the construction costs or in the form of Mello-Roos.

That’s why property tax rates in Texas (and other areas) are double what they are here. So while you only pay $200k for the house, you’re also paying $4,800/year in property taxes. That adds up after a while. $200/month in additional property taxes is equivalent to making an additional mortgage payment on another $30,000, so that right there makes your $200k home purchase in Texas the equivalent of a $230k home here in California.

Lastly, there’s also the workman comp premiums and other labor-related costs other than wages. Those aren’t going away either.

So yeah, there’s lots of good reasons why new construction in California will always be higher than in Texas. But there’s no real reason for it to be double or triple, and there never was. The only reason it was higher was because people were willing to pay more.

[jpinpb]

“The only reason it was higher was because people were willing to pay more.”

All back to teaser rates, allowing for low monthly payments for a year or two, just in time for you to flip and make $$$ be retired – or retarded if the plan doesn’t work.

[jpinpb]

“The only reason it was higher was because people were willing to pay more.”

All back to teaser rates, allowing for low monthly payments for a year or two, just in time for you to flip and make $$$ be retired – or retarded if the plan doesn’t work.

[jpinpb]

“The only reason it was higher was because people were willing to pay more.”

All back to teaser rates, allowing for low monthly payments for a year or two, just in time for you to flip and make $$$ be retired – or retarded if the plan doesn’t work.

[jpinpb]

“The only reason it was higher was because people were willing to pay more.”

All back to teaser rates, allowing for low monthly payments for a year or two, just in time for you to flip and make $$$ be retired – or retarded if the plan doesn’t work.

[Author]

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