Prices in Florida are trading at 50% of replacement cost - trade prices? Edit - ah, I see you are only claiming that for distress bulk sales. Any idea what normal retail transactions for single units are going for?
But that isn't the claim you made. You claimed the seller would not get more than $35k. Yet the seller would be selling to a retail buyer, or selling at auction. The appropriate comparison is a normal buyer as a single unit sale (most likely a retail person, or small landlord/investor), not an institutional vulture fund as part of a 100+ package deal. If I buy 100 Porsche 911s from bankrupt auto dealers I am sure I can get a nice discount from the list price. That doesn't mean you can buy one from Porsche for half list.
These homes that the article addresses, in that particular municipality in Florida - there is no retail market for them at this time, much like many parts of the country. Hence, the government program to subsidize the costs of housing at taxpayer expense attempts to tie in 1) employment (even low wage employment) and 2) residency requirement (in this case, an assurance by the recipient of the government subsidy that they will live there for a minimum of 10 years). One thing I noticed, ESPECIALLY in Arizona, Florida and Nevada - homes were being built en masse in areas where there was no job base or employers (that would come anywhere near employing the numbers of rooftops going up), and far from any major source of jobs. The first question I asked was 'were these intended to draw retirees?' In 80% of the cases, they were subdivided, single family homes, or low cost, very dense, attached condominiums (many having steps to the upper units), neither of which cater to seniors (who want maintenance free, one story - zero steps - condominiums, preferably near a golf course or such).
Hmm, I'd be surprised if there aren't *any* single unit transactions. A quiet market is understandable but not a non-existent one. Still, i take the point about them being "fake" communities & locations - sounds like the bubble was even more crazy than I thought. How about the broader state (Florida) then, what kind of price to replacement cost are you seeing down there? I doubt it's anywhere near a bottom but once it gets there I'll certainly be interested in buying.
Cutten, I didn't say any retail transactions - after all, there are people who need to live near work still, and other being transferred for work, and some who are choosing to retire to Florida. But it's a diminutive trickle compared to normal levels. Also, buyers are playing extreme hardball now, and this includes retail players competing against investors. Everyone is fearful of overpaying by any significant margin while not having a firm understanding of where the floor really is. As far as replacement cost is concerned, I can tell you full credibility that those numbers are dropping, also, as the price of trades drops, and as many of the materials to build is still low or falling - lumber, windows, drywall, insulation, carpentry, electricians, roofers (but not shingles), painters - all much, much lower. The only materials I have not seen come down in price are asphalt roofing shingles and concrete.