Mxsmanic wrote in
:

Marty Shapiro writes:

"Expensive" is a relative term. Is $400,000 expensive for a house?

By a factor of ten or so, yes.

In some parts of the country, yes. In other areas, it would be so
cheap you would think something was seriously wrong with it.

I go by the construction cost, as opposed to the sale price. Most
homes priced at $400,000 don't cost $400,000 to build.


Does your construction cost figure in the cost of the land? How about the
carrying costs (interest either paid or lost opportunity), inspection
costs, and property taxes until the sale completes? Are the architects,
builder, and the subcontractors allowed to make any money, or do they just
supply their time and effort gratis?

There are areas in California where houses are sold in the $1,000,000 price
range and immediately torn down. Just the land is worth the purchase
price. The "construction" cost is the cost of the land + demolition cost +
building cost.

Do you have any idea what the 3 most important factors in determining the
market value of a house are? Hint: Construction cost is NOT one of them.

--
Marty Shapiro
Silicon Rallye Inc.

(remove SPAMNOT to email me)