Re:US economy returned to growth last quarter, expanding 2.6%
by hedora on Thursday October 27, 2022 @11:51PM
(#33367462)
Materials aren't the largest cost around here (California) There has been a massive worker shortage since 2008, so even incompetent people can charge way more than material costs for most installation jobs. (And then you pay a second person even more.)
Permitting, engineering, etc are also expensive.
Finally, construction costs are difficult to estimate up front, so it is difficult to be a rational actor when deciding to build or not.
After all, if you hit a 33% cost overrun half way through building, your best option is to pay the 33%. At that point the house costs 83% of the expected price of starting over. If you stop now, then you are out 50% of the initial budget.
If you think facing such a tradeoff is rare, look around for lots that are for sale with pre-approved plans or partially constructed houses. They're usually pretty easy to find.
Permitting, engineering, etc are also expensive.
Finally, construction costs are difficult to estimate up front, so it is difficult to be a rational actor when deciding to build or not.
After all, if you hit a 33% cost overrun half way through building, your best option is to pay the 33%. At that point the house costs 83% of the expected price of starting over. If you stop now, then you are out 50% of the initial budget.
If you think facing such a tradeoff is rare, look around for lots that are for sale with pre-approved plans or partially constructed houses. They're usually pretty easy to find.