You don't understand the term "market".
> What's worse, when buyers today see the prices of McMansions plunging, they expect to see the price of a well patterned home (that may have cost 5x - 8x as much to build) also plunge, despite the more complex home already having a replacement cost higher than its asking price, price of materials and labor having risen.
There's a cost associated with being "goofy". If that cost exceeds the benefits, perhaps you should reconsider your decisions.
Less flippantly, "the market" and "the market for a well-patterened home" are two different things, and with zero properties of any kind changing hands for 10 - 12 months in certain affluent zip codes (home prices from seven to eight figures and sellers withdrawing listings rather than lower pricing), data is insufficient to establish what the broad market is, much less what a niche market would be. With no comps, pricing becomes arbitrary.
Actually, it does. Past performance is no guarantee and all that.
> Less flippantly, "the market" and "the market for a well-patterened home" are two different things
Yes, the latter is a subset of the former. So?
> data is insufficient to establish what the broad market is, much less what a niche market would be. With no comps, pricing becomes arbitrary.
Actually, that data tells us that sellers in those places want too much money today. They may be able to get it tomorrow, or maybe not.
> With no comps, pricing becomes arbitrary.
Comps are not the final word on pricing. They aren't even necessary.
People buy when when they'd rather have what you're selling than the money that you're willing to accept for it. People sell when they'd rather have the money offered than the good they currently possess. There's nothing more to it than that.
Cost doesn't come into it. Neither does any notion of "intrinsic value" beyond the above.
If you perceive that the value of something that you have is more than you're being offered, that's the market saying "keep it".
Or, with no supply, and no demand, it could be argued there is no market--no people showing up saying anything at all.
This table is missing a line: http://en.wikipedia.org/wiki/Market_form
"The main criteria by which one can distinguish between different market structures are: the number and size of producers and consumers in the market, the type of goods and services being traded, and the degree to which information can flow freely."
Here we see few to no sellers, few to no buyers, and no information flow. By http://www.answers.com/topic/market definitions 4d or 5, there is no market. By definitions 4a - 4c, the market is halted, illiquid, or frozen.
I'd also argue against the idea:
> that data tells us that sellers in those places want too much money today
It may tell us buyers don't have enough money, which seems a different thing entirely.
Externalities innate to producing a type of home may put such a home out of reach of the set of individuals presently seeking to purchase a home. Building a home absorbs labor, materials, land, and other inputs; those must be paid for in their appropriate markets (not a question of 'perception'), and a rational builder/seller will not build/sell for less than those costs unless forced.
To some extent, people actually will pay for quirkiness. It can be easier to find a home you love in a neighborhood with a mix of houses of different ages and styles and owner-modifications. Old houses can be more valuable partly because they've been modified over the years to be more livable. But for houses that are farther from the norm, it's harder to match the right house to the right buyer.
(I say this as the owner of an 80-year-old house in Seattle with some very odd changes made by previous occupants.)
Folks like Lindal Cedar Homes spend money marketing livable homes as an experience, but the general population isn't yet aware of the benefits or why they should even desire such a home.
I don't own a Lindal home, but do love this collection and their "small home" collection:
Seems as though the only way to move such a property is to offer it so far below market that people become willing to compromise and consider the more livable home instead of yet another generic "keeping up with the Joneses" colonial:
http://images.google.com/images?q=colonial%20house (exteriors)
It's galling, because such easily substitutable boxes have little intrinsic value beyond market. The cost to build a colonial is quite low compared to the cost of building, for example, "... varying ceiling heights between large and small rooms to create different degrees of intimacy."
One eye-line in my home reveals 8 ceiling heights, correlating to the intimacy of the spaces below them. It's extraordinary, but generic buyers want five bedrooms with full baths so what should be livable spaces end up the size of closets.
What's worse, when buyers today see the prices of McMansions plunging, they expect to see the price of a well patterned home (that may have cost 5x - 8x as much to build) also plunge, despite the more complex home already having a replacement cost higher than its asking price, price of materials and labor having risen.
(PS. Serious inquiries welcome for a well patterned home a commuter train ride from Manhattan.)