Only the rich can buy a home in California?

Question

I've seen many new home developements with vaulted ceilings, mini-vineyards, huge houses on little tiny lots...Why can't some developer built some homes for us regular people?
A normal sized home with plenty of closet space and a decent (not designer) kitchen that is set more than 3 feet from the neighbors house.
I realize that they need to make money, but more people could afford homes in this state if the builders weren't catering to people who already own 2 and 3 houses.

Your perspective/opinion is welcome.

I know what you mean about the 'cookie cutter' houses. My father just bought a new one and there are cracks all over.

Also I have looked at older homes and people have been doing the same thing. Fixing them up with marble this and corian that. Unless you buy a major fixer yourself.
10 years ago I could have bought a house in the SF bay area on my $10/hr job. Suppose those days never to return?

Answer 1

They have a certain amount of LAND for a development. That's all they have, and they are not getting any more. For this, they paid $X, and once they have it, it's going to be years going through the permit process.

Furthermore, it's silly, but people buy a property based upon the structure and the amenities. Well, it's not silly to make that one of the factors, but people go overboard. They will buy a 5 bedroom 2800 square foot house on a 3000 square foot lot before they'll buy a 3 bedroom 1800 square foot house on a 20,000 square foot lot. The same structure is really worth a lot more when it's on a bigger lot, and even a lesser structure may really be worth more if it's on a bigger lot, as is likely to be the case here. Add travertine and granite countertops and the fact that it's *new* to the 2800 square footer, and you've got people willing to pay $800k for the first property as opposed to maybe $550k for the second.

The developer knows this at least as well as your average real estate agent. The developer has all of this researched down the the last centimeter of the lot lines. They are not in business to build wonderful homes that people are going to be happy in forever; they are in business to make money, and the blinged-out houses on the smallest possible lots bring in the most money for that developer. The fact that you're the very first person to live in the house is a further attraction to the kind of person who buys new cars, which is to say, most of the population, and it's worth serious $$ to that developer's bottom line.

Nor is the developer alone in this endeavor. They wouldn't make the most money from homes like that if people didn't pay the most money for homes like that. You want the real culprits in this scenario, look around you in any large crowd. It's all to easy to blame the developer, but the desires of the average home buyer and the regulatory environment both played huge factors in getting the state of new housing to where it is now.

There are ways to potentially fix the problem - but none of them has any measurable political support. Your best bet is to find a good buyer's agent to defeat the problem on a retail level, that is, for yourself, because wholesale solutions are not likely until people get rational about solving society's problems.

Answer 2

Why buy a new home? Perhaps you are in an area with mostly new construction, like the desert.

New builders are paying high price for the land, and they get the most bang for their buck by building the prettiest home possible. There still isn't a market for mid-level homes when you can spend an extra $20K and build a house that you can sell for $50K more.

By the way, don't assume that these homes are super high quality construction. When you look carefully, you'll find door frames, closet hardware and doors, and other house pieces that are just the same as the Home Depot cheapies.

If you are concerned about affordable housing, write you local government and state officials about stopping the 'slow growth' and other similar environmental causes. They make it difficult and expensive for builders to make houses, leading to only expensive houses that benefit rich people, rather than normal houses for normal people.

Answer 3

The builders are trying to cash in on the real estate market. I live in a 4 bdrm home that is 100k less than the "designer" homes in the same neighborhood. I bought my home "used" not the original owner. Also, the model homes you are veiwing are designed to appeal, but look almost nothing like the home you buy even new, unless you spend an add'l $50,000 for the options and upgrades. I have worked for the design centers who decorate new homes. I would never buy a new house as the new flooring etc has a HUGE markup etc. Try looking for currently owned homes first, or "new" homes that the owners are desperate to sell (bought more than they could afford). If you live near the beach/coast, cost will always be higher than say inland. I live in Riverside county now, which is far more affordable for a decent home in the high 300K's to mid 400k's. I've also lived in San Diego, Los Angeles, and Orange County. The more inland you live the less expensive it is.
Hope you find a house that suits your needs

Answer 4

Yeah I totally know what you mean. San Diego housing right now is just insane. And the money you pay for the houses they probably aren't even worth the money. I could live back east in a mansion for 450k. I work for a mortgage company right now and i'm at work...Shows you how busy we are right now. But if you wanna look for a house try the CHFA program and the silent seconds that some cities such as national city and sacramento are just a couple. They help you with your down payment and closing costs. There is a limit on how much you make for this programs.

Answer 5

I live in California right now (Southern Cali) and it is really stupid. For some reason, San Diego has the highest house and gas prices in the nation. Apparanetly they build such extravagent houses with giant rooms (not often) and they put them on small lots because of a few reasons:

-They are stupid
-They think people don't stay long in their $800,000 shacks, they expect people to go to the beach and other crappy places.
-They are trying to maximize profits per space. They are trying to fit 582,975,902,870 Californians into a 1,200 sq. ft. apartment that costs $6500 a month to rent (aka SCAM)

If you live in Cali, then you'll notice that in the major cities, you walk out of your back door and open your arms, only to hit your neighbor in the face. They make what I like to call, "cookie cutter" houses. This is where developers put hundreds of big houses on small lots in an enclosed space to give people "variety" (they have a yard 2ft. to the left or something small) so they get that warm fuzzy feeling inside knowing they didn't get scammed THAT MUCH on their $800,000 shack.

I personally think it is retarded and stupid that people even consider living here for the price of the crap you get. (I'm here because of military orders)

Answer 6

I live in western canada where the price on homes has gone threw the roof . A down payment is needed and most ppls do not have it. prices have gone from the 150's to the 450's .everything has gone up but the wages.it is the same all over the place not just in cailf.But beware of the crash.we had it here in the 80's alot of people he had to walk away from their homes they could not sell them nor live in them.interest rates went up and thats when it started.just keep your nose down bide your time get enough for a down payment and you will be on your way

Answer 7

Its about bang for the buck. The LAND portion is what they can't control-- land keeps going up and up. So they buy a plot and plat it for as many houses as they want-- because CONSTRUCTION Is where the markup is.

They can make more money off of 100 upscale homes than 100 reasonable homes.

Answer 8

Developers try to cram as many houses as possible -- and legal -- to make more money. If they put fewer houses in the same acreage, they would have to ask even more for the homes. It just makes economic sense for them.

Answer 9

I'm sorry? Where's the money in building houses for average/poor people? You SURELY don't expect property developers to have a social conscious do you? It's the slums for all of those of us who aren't CEOs, movie stars, or people willing to sell their soul for a mortgage.

Answer 10

There is a bigger demand for more living space, not yard space.
Do what I'm doing and lower your standards and look for an older home.