Someone please help me understand this: I know the current housing price is artifically propped up, but why can't I build a new house at lower cost? The materials are cheaper, contractors need work, so building a house should be cheaper than buying one right? Is it true?
I wish it were so, I'm renovating/adding on in Fort Lauderdale and I can tell you it's still more expensive to build than to just buy. We're over our original budget by I don't want to say how much, and although there are deals and contractors will now return your phone call and even show up, it is expensive. It is better than two years ago though, I had one of the only contractors that would look at my plans briefly glance at them and tell me he would do the project for $1M when I was thinking $400k maximum.
I guess if the contractors base their quote on current housing price then we are not getting a break.
You probably couldn't be your own general contractor and build a house cheaper than a professional home builder, not to mention, open lots with utilities, roads and local amenities are not cheap. Besides, just like they say, it's all about location. In extreme examples, buyers will bulldoze mansions and rebuild a home they want, just because of the neighborhood or ocean view. The housing bubble mostly ignored properties built in BFE.
Maybe others can comment better than I, but lumber roofing s/r cement blocks ? It is like a mexican stand off, nothing is selling and the prices aren't dropping. copper wire is down, insulation a tad but something gotta pop. Labor probably has fixed costs that aren't dropping, only the wage could drop. who wants to work for nothing? It is a friggin mess. If raw land drops in price, who wants it and where? Probably one could give land away and the difference wouldn't add up to much in the wages lost equal to the total cost to have much change to current house prices.
Here in Vegas, I can buy a new home from a builder for cheaper than I could get a comparable foreclosure in good condition. And people wonder why the builders keep building. Many established builders may have bought land before the boom. If that's the case, you'll never be able to build it yourself at the same price. You still have to buy that land at the current price, which is slightly inflated.
An option that I have been looking in to is a custom modular home. No that doesn't mean double wide trailer home Check it out, there are many benefits and savings to be had with this method of construction. http://www.zncustombuilding.com/why-modular-housing.php (I am in no way affiliated with above company).
In 2010 I'd like to build a LEED Platinum Home like this one: http://www.betterhomebetterplanet.com/index.php?mode=systems It cost less than 500k to build.
recent article in Ny area states that the 15-25% discount of a modular over a stick built is gone. They are pushing the time value. also it appears they are building modulars with plywood on exterior walls and interior wall, with s/r over the interior plywood panel. I don't know why this is unless they are using scraps for 2x6 framing and depend on the extra sheet of plywood for integrity.