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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Blaming the developers per some of the comments above is so misguided.

Demand sets property values.  Property values set price.

[b]If there was less demand for larger new builds, they would not be built. [/b]

Scenario #1

Buy Existing House - $700K
Build New House - assume $150 per SF simply for sake of argument - 4,000 SF - = $600K
[b]Builder Profit - 20%, transaction fees, etc   - 350K[/b]

Sales price $1,650K

Scenario #2
Buy Existing House - $700K
Build New House - assume $150 per SF simply for sake of argument - 2,000 SF - = $300K
[b]Builder Profit - 20%, transaction fees, etc   - 230K[/b]

Sales Price $1,230K

Three things happening here

First - The builder makes more money provided that there is a market for the larger house

Second - the smaller house still costs $1,230,000 (and probably slight more on a SF basis) which I don't think most would consider affordable unless..........

Third - the price of the existing home inventory is largely a function of the price of a new build.  Simply put, if you are in an old house surrounded by new builds you should thank them for putting money in your pocket.

The builder/developer is just responding to the market.  Land is a scarce commodity, more so in desirable areas - this is capitalism at its best.  If you really disagree, grab your neighbors, fight and get zoning laws changed.  The builder is working within the law and responding to the market.  Your anger with the developer is misplaced.  Even if he was providing the product you desire, you couldn't afford it unless everybody took a haircut in the value of their house.   
[/quote]

100% BS

The builder is ONLY trying to maximize profit.  He doesn't care about the neighborhood or fitting in.  Once he makes his sale he never looks back.  It has nothing to do with the market.  There is way more demand at $1.2M than $1.6M.  Some sucker will come along though so eventually the $1.6M will sell.  But it's not what the market generally wants.  The one and only reason why we have so many over-sized new home is that builders are greedy.  Period.

[/quote]

+ 1000[/quote]

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