High end homes

Comments

• Puget Sounder

  February 2007

  $2.5 million with no view and less than an acre of a lot...
  
  I don't care how many granite counters it has, the price of last sale seems much more reasonable.
  
  This is the most ambitious flip I've seen in the Puget Sound market place on a time/dollar basis!
• joetheconsumer

  February 2007

  It's fun to point at these flipper fools, but until these houses actually sell at these prices, I don't see any impact to the market. Many of the homes that folks point out as ridiculously priced are just that - priced well above any market comparables.
  
  If flips are priced right, and then not selling, that's a different story.
• Locust

  February 2007

  I think the main factor in the pricing of new or nearly new high end homes is simply the cost of development plus 10%. Obviously, the buyer doesnt care what the builder spent, he only looks at market prices, but the developers will certainly try very hard to set and stick with pricing that covers their costs. They will not build houses when the market price wont cover their costs, unless they guess wrong about the market.
  
  Here is a great example:
  
  MLS #26023925
  
  This is a developer who has optioned a two acre lot, and is hawking an off the shelf architects northwest plan "custom" home. The listing indicates he hasnt closed on the lot yet and hasnt applied for a building permit yet. So this is a pure spec house offer. The $1.8 mil pricing is a calculation based on the cost of the lot, the cost of construction, and a reasonable profit.
  
  Because these developer spec houses typify the eastside market in the $1.2 mil to $2.0 mil range new house market, construction costs drive the prices. Comparable older existing houses will tend to be priced a notch below the cost of construction pricing of the new ones.
• T, V & Mr. B.

  February 2007

  About the only local condition that does help raise the price of a home is that here, permits etc... raise the cost of building a home substantially more than it used to. Not many years ago, it cost about 110.00 per square foot to build a home with nice amenities. That price has now jumbed to about 210.00/sq ft. from what some local contractors I spoken with state.
• Locust

  February 2007

  My recent experience has been the same on construction costs. We are getting ready to start building a new home, and the contractors laugh when you talk about pricing under $200 per square foot. Nicer stuff like you would want in an actual custom home is over $250 per square foot.
  
  Now a production builder doing a subdivision can certainly build more cheaply, both in terms of cost and quality.
• ErikS

  February 2007

  I wonder how much of the increase in construction costs/sq ft is simply due to the level of construction activity. Obviously contractors will be in position to charge more whenever their services are in high demand.
  
  I also wonder how much of the increase is to changing expectations. Now that granite countertops are considered a baseline for acceptable "quality" they have to go find ever more exotic surfaces. Also, 10 years ago was it considered necessary to have a 400sf motorized closet and 2,000+ bottle wine cellar? Superfast internet connections? I think that the increasing cost of keeping up with the Joneses has been nearly as much of an factor as permits and lumber.
• T, V & Mr. B.

  February 2007

  Lumber and materials aren't so much the issue. It is permiting etc... Which is the only place realtors have a legitimate argument. those that I spoke with...the ones who are earnest, really are trying to get Olympia to do something about this...what they can do who knows.
• Locust

  February 2007

  I have been told that lumber costs are way down from what they were a year ago. It is due to the big slowdown nationally in new residential construction. The frustrating part is that this does not seem to bring down the overall cost very much.
  
  Permitting and conditions imposed under the new Critical Areas Ordinances is an expensive and time consuming factor, for sure.