Development policies

[bill1952]

I found this article on Portland OR development policies and housing shortage interesting albeit a little long. https://www.opb.org/article/2023/04...tland-neigborhoods-building-codes-developers/

 

[mtlogcabin]

"Wood usually aims to make around $40,000 gross on each house."
That is $50.00 per sg foot or 13% for each 800 sq foot unit.

$20,000 after taxes or 7.5%

And the realtor will make about $13,000 (5%) per unit without having any risk in the game.

But developers are greedy and charge to much.

 

[bill1952]

"Wood usually aims to make around $40,000 gross on each house."
That is $50.00 per sg foot or 13% for each 800 sq foot unit.

$20,000 after taxes or 7.5%

And the realtor will make about $13,000 (5%) per unit without having any risk in the game.

But developers are greedy and charge to much.

13% profit - before the redi-mix truck drivers go on strike, or you find a bone or old pot and work stops, or someone sets fire to your lumber deliver, or whatever risk - isn't much.

But the market will ultimately decide, and it seems it has in Portland and there is not enough development to satisfy government.

 

[mtlogcabin]

In the 60's and 70's a contractor would figure a 10% profit and when everything was complete, they were happy to realize a 4% or higher profit.

It's the realtors' fees that add up and are passed onto the buyers to the 30-year mortgage that frost me. How much time and work does a realtor actually do to warrant the percentage they charge.

Fee on the raw land to the developer.
Fee from the developed land to the contractor.
Fee from the contractor to the homeowner.
I would estimate it adds 15 to 20% to the final price of the home.

 

[bill1952]

In the 60's and 70's a contractor would figure a 10% profit and when everything was complete, they were happy to realize a 4% or higher profit.

Which is less than annual inflation so they would loose money today on every project.

 

[steveray]

In the 60's and 70's a contractor would figure a 10% profit and when everything was complete, they were happy to realize a 4% or higher profit.

It's the realtors' fees that add up and are passed onto the buyers to the 30-year mortgage that frost me. How much time and work does a realtor actually do to warrant the percentage they charge.

Fee on the raw land to the developer.
Fee from the developed land to the contractor.
Fee from the contractor to the homeowner.
I would estimate it adds 15 to 20% to the final price of the home.

Land of the Fee, Home of the Brave......

 

[Inspector Gadget]

Study some basic legal things and FSBO.

 

[Keystone]

I've purchased several homes, 3 of them using just a real estate attorney.
IMO, RE agents are by and large unnecessary and overpaid but I digress.

Development is a risky business and the profits are part of the reward.
Can developers charge less, possibly. Should they be forced to be charge less or allow the markets to determine price. If people are buying at those prices then I’d say the market has spoken.

 

[mtlogcabin]

RE agents are by and large unnecessary and overpaid

That was my attempt to point out with sarcasm. They can significantly add to the price of a development/home. Yet it is the greedy developer and building codes that seem to be blamed for the increased housing prices.

 

[bill1952]

blamed for the increased housing prices

Not realtors, developers, codes - purely the market. 4 years ago when we moved, hundreds of listings in this county, and probably 25-30 in this village. Now 2 to 4 in this village, and they go fast. Absolutely crazy.