re: Homebuilders cancelling contracts to sell for more on market

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Sometimes you don't know your total job cost until the very end. The very end is usually about a week before closing.

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I get what you're saying there but I can't see being 20% over budget and not having any idea until a week before.

About to start building on a piece of property we own.

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hat talking point is so overstated

Take the % of Americans who actually work office/white collar jobs

Then take the % of those jobs that are able to work from home

Then, what companies are allowing it, permanently

Then, how many of those people are actually going to uproot their life and move. I think this is much less common than this board would have you think, especially for people with kids

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Exactly. That number - not big to begin with - is dropping daily.

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Sometimes you don't know your total job cost until the very end. The very end is usually about a week before closing.

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You might not know the total cost but you should have a pretty damned good idea of where you are trending vs. your estimate, no?

I realize that residential construction doesn’t have the same amount of project controls as industrial, but surely you have some way of tracking estimated cost at completion. In the industrial world, contractors go after change orders based on trends all the time - particularly for escalation issues, where you could be screwed if you go to a customer hat-in-hand after completing the work and they tell you to shove it.

As you said it’s probably a very lopsided contract where the builder doesn’t have this concern. They own the property, and they know that they can sell it regardless. I agree with others that it’s pretty shitty. But I also agree that it’s largely a function of the business model that makes it possible in the first place.

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Yes but in many cities even finding a lot is out of range for most people and you will more than likely need cash to move on it. That is if builders don't snatch it up before you do since they usually know about it before the general public.

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Yep. We were casually keeping an eye on lots the past year, and it was wild what we would come across.

We close on a house this week that we feel incredibly lucky having found, and I just saw today that a dilapidated tear-down one street over on a lot slightly smaller than our new one is "sale pending".... for $775k

$775k to tear down and build. Mind blowing.

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Those people aren't buying homes but I guess they could be put in Section 8 housing paid for by taxpayers.

More seriously, where are these people coming from? Where were they living two years ago? Of they are migrating, wouldn't the places they are leaving see excess inventory?

There is something more sinister at play here, IMO. Blackrock nd Vanguard are probably just the tip of the iceberg.

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Im not sure anything sinister is at play here. A lot of them are renters who put off buying traditionally longer than most due to covid. Hell, for 18 mos, a simple open house was frowned upon in a lot of areas. Couple that with the latest census showing people moving out of the northeast and rust belt as well as city centers, and sunbelt suburbs are getting slammed.

As for the southern border thing, a lot of the country is is experiencing a sellers market, but Texas is currently a whole other level. Also, while I'm sure there are exceptions, I don't believe a lot of illegals are making themselves known to the federal govt by requesting Section 8 housing.

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At this point you'd do better just to buy your own lot and build your own house versus buying in a development.

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Then the problem becomes finding a builder willing to build. Around here, none of the custom home builders will return your call because they have a waiting list a mile long, and if they do call you back, they won’t touch a project unless you’re spending well over a million.

132k in 1996 was a lot of money. That was an expensive house. I’m talking about these little simple cookie cutter houses that are all over the Houston area that were selling for 150 to 200k just last year.

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Sued them and found another place. Recently settled. Ended up finding out that the builder was advertising it under the table even though we still had a contract. We found out the builder entered into another contract while my lawsuit was pending. Unreal antics.

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Glad it worked out for you! Out of curiosity, Did the number you settle at feel satisfying?

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Here’s a wacky idea, how about people learn to live within their means.

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That's a great talking point white collar, office job Andy.

You are ignoring the fact that there are a lot more low and lower middle class folks than their are well to do folks like you.

Your average Joe is now competing with government backed, institutional investors for fricking sub $300K starter homes.

That is just not how it should be; a permanent rentier underclass with zero hope of rising out of their station is being broadened everyday.

I am not a "Everyone needs to be a homeowner" Andy but when that becomes unattainable for a large portion of the populace, you are just asking for problems and violence.

If you want a violent revolution, this is how you get it. Make the basics of life unaffordable and unattainable.

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132k in 1996 was a lot of money. That was an expensive house. I’m talking about these little simple cookie cutter houses that are all over the Houston area that were selling for 150 to 200k just last year.

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The cities population quadrupled over that time span.