help me understand...

Discussion in 'Real Estate' started by Smiling JOe, Aug 30, 2006.

  1. Smiling JOe

    Smiling JOe SoWal Expert

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    I hope that someone can help me understand why we continue to see entry level homes being built with granite counter-tops and nice solid hardwood flooring. Am I just stupid, or does that not add up to common sense? It is all people can do to afford an entry level home in many cases, so why the hell would they expect to get granite counter tops and nice flooring, and have to pay for it over thirty years? Call me crazy, but that, IMO, is just plain crazy.
     
  2. Jdarg

    Jdarg SoWal Expert

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    I would trade a few hundred more square feet and maybe a garage for the fancy kitchen!
     
  3. hutch

    hutch Beach Lover

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    SJ- Got me! Why do people buy new cars with a 6 disc CD changer and sunroof for a car that sells for $13,000 then add these extras? Builders could lower the price of the homes without these features, but maybe they sell better with these extras and now you can finance it for 40 years. I think I saw an ad of a local builder that will build you a home on your lot for $134,000in the local paper. House has 1200sq. ft with hardwood floors not sure about the tops. The problem is finding a lot anywhere to match the house cost.

    the hutch
     
  4. TooFarTampa

    TooFarTampa SoWal Insider

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    I am with you SJ. This has happened in the past 6-7 years and it is amazing to me. On one hand, if people are spending $300K for an entry level home, they feel like they deserve such extras. So it kind of makes sense. On the other hand, it is another example of how luxury items like granite counters and flat screen TVs have become not as much a luxury for some people as a perceived necessity. This kind of thinking has increased the personal debt rate to alarming new heights, but it also has driven our consumer-based economy, so there you go.

    The "granite and stainless kitchen" for some reason has become synonymous in the minds of many for "good design," when clearly, CLEARLY it is not. It is a lazy way for many builders to impart a feeling of value, when as jdarg puts it, a better or roomier floor plan or excellent location is a much much better investment. But not everyone gets this. Not at all.

    I do applaud the switch back to hardwood floors as being more "standard" than they have been in many years, though, because that is an upgrade that truly adds value and it is healthier for a lot of families to live in. Unfortunately there are substandard hardwood lines being made and installed now too, basically builder knockoffs of the ultimate flooring, which is site-finished, solid maple or oak (or heart pine if you have tons of $$$). So caveat emptor.
     
  5. Unplugged

    Unplugged Beach Fanatic

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    SJ, I'm also fascinated by the choices people make with regard to what some might consider upgrades to a new home. I'm not sure that it's a lack of common sense or 'crazy' for someone to want the highest quality they can possibly afford even if it's in an 'entry level' home. Pride of ownership comes in many forms I suppose? Just an observation...
    ___________________________________
     
  6. Smiling JOe

    Smiling JOe SoWal Expert

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    I understand the consumerism part just fine, but people who need the entry level homes are being priced out of the market due to such additional costs, so they are not the ones buying. What ever happened to fiberglass insert tub/showers, Fromica(TM) counter tops, vinyl flooring, white colored appliances, etc? This is ENTRY LEVEL we are talking about! For a normal person to afford a $300,000 home, they should have earnings of $100,000 per year. Many people don't come close to that. They simply cannot afford entry level homes, which really means that these homes, with all of the upgrades, are not truly entry level. They are really low-mid grade.

    There are plenty of people who can afford the upgrades, but there are many people who cannot. You would see more sales if there was more selection of homes below $300K.

    Hutch, I know the ad which you mention. Hendco is offering that, but I think the house is 1450sf. The other homes which they have built on that floor plan typically include granite counters, and a few other upgrades. Currently, you can buy lots for $60k-$80k off of hwy 393 N, so realistically, you should be able to build a home for < $250K. If they ditched the upgrades, it would be even more affordable.
     
  7. Uncle Timmy

    Uncle Timmy Beach Fanatic

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    SJ, you make an excellent point.

    I have commented a few times on how the now 'standard' features like stainless steel appliances and granite countertops is contributing to the high cost of construction. These items really add up.
     
  8. Mermaid

    Mermaid picky

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    I think the upgrades are a nice little bit of gravy for the builders. We had to gut our kitchen at the condo so I did a lot of appliance research. For top-of-the-line Maytag appliances (stove/fridge/microwave/dishwasher), the difference between stainless and white came to $910 extra for the stainless finish. Now compare this to the newly built Seagrove Highlands condos which are not far from ours. The builder is charging $1800 extra for a stainless appliance package. See, a $900 profit for them without very much effort on their part. I do applaud their offering the consumer the choice to upgrade, however. I don't the see the logic of not offering the choice for "entry level" housing. It seems to penalize many.
     
  9. Beachlover2

    Beachlover2 Beach Fanatic

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    Imagine that extra 1800 over the course of paying for it for 40 years!!!!:eek: Plus the appliances won't last that long.
     
  10. Miss Kitty

    Miss Kitty Meow

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    Interesting post. I didn't have stone countertops until my third home was remodeled in 1998. I have been a homeowner since 1979. Of course, back in my day, Corian was all the rage. Do first time homebuyers expect these updates?
     
  11. Smiling JOe

    Smiling JOe SoWal Expert

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    That depends on the amount of money in their parents bank accounts and the generosity of those parents.

    If they are just trying to get by and don't have deep pockets, I think most would be satisfied with lesser grade products, especially if it means the difference between buying and not buying, or struggling to pay bills and not struggling as much to pay bills.
     
  12. Miss Kitty

    Miss Kitty Meow

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    You mean to tell me that our parents would have helped us buy a house???? :doh: POOT! We did it the hard way...we earned it!
     
  13. TooFarTampa

    TooFarTampa SoWal Insider

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    I don't know if that's true anymore. Lots and lots and lots of people (but by no means all) consider these items to be "must-haves," which explains why many in their 20s would much rather buy a tiny condo in a new building that has granite counters and stainless appliances than purchase a home in an established neighborhood that needs some work. I don't know if it is the demands of the consumer that have driven the market or that the buyers are just more susceptible to what the builders/developers are telling them they should want, but either way it just doesn't make a lot of sense.
     
  14. Smiling JOe

    Smiling JOe SoWal Expert

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    I think that too many people have been watching "Flip This House."
     
  15. kathydwells

    kathydwells Darlene is my middle name, not my nickname

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    I was thinking the exact same thing SJ!
     
  16. Pirate

    Pirate Beach Fanatic

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    It is interesting to see such a wide variety of opinions on this board. On one post there is an off beach house for sale in Watercolor with an asking price for the structure in the $350-$400 a foot range because of the finishes and well over a million for the lot. On another post there are people complaining that they can't get their house built for less than $200 a square foot in the same area. Now entry level houses for under $240k. If the lot is $80k and you put a 1800 s.f. house on it, bare bones you will be looking at a $389k sale price. Figure $125 a foot for construction and a 10% overhead and 10% profit. Then don't forget about the realtor! Be nice and say 5%. Basic home construction costs are less than a top of the line house but granite and crown moulding dont make the costs $400 a foot. Also removing the upgrades doesn't make the $200 a foot house $80 a foot. If buyers didn't want the granite I assure you it wouldn't be there. It's all part of the credit mentality because they only cost $12 a month. I agree that way too many people are watching "Flip this house", but apparently haven't noticed the people losing money on that show.
     
    Last edited: Aug 30, 2006
  17. TooFarTampa

    TooFarTampa SoWal Insider

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    Bingo.
     
  18. SHELLY

    SHELLY SoWal Insider

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    The Real Estate market stopped "making sense" about 5 years ago. :idontno:

    The SS appliances and GCT is to builders/flippers like undercoating and the side body stripe is to car dealers.

    I guess one marketing ploy that can be used to push these over-priced houses is to say that the GCTs can serve double-duty as a tombstone once the poor overstretched homeowner drowns in debt.
     
    Last edited: Aug 30, 2006
  19. spinDrAtl

    spinDrAtl Beach Fanatic

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    The poor 'woe is me' overstretched homeowner has no one to blame but themselves (I make exception for something such as an unexpected job loss, however). Does anyone remember being the taught the difference between 'want' and 'need' when they were little? We could sit here and rant all day about keeping up with the Jones', and the instant gratification of credit cards, the internet, 24 hour new channels, and on and on. How about a little personal responsiblity for the choices one makes?

    As someone said, if the buyers didn't want these things, you can bet they would not be there. I for one am not big on telling other people how to spend their money, intelligently, stupidly, or any other way.
     
  20. 30A Skunkape

    30A Skunkape Mr. Small Box

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    I think the constant image bombardment of top-of-the-line kitchens and baths on HGTV, etc has alot to do with this. The funny thing is, I have been in some new homes on the market in SOWAL, and while they had the stainless/granite kitchens, the overall craftsmanship stunk! Poorly finished moulding, poorly fit appliances, cheapie plastic doors, cheapie windows, etc, etc. And these WERE the entry level models( >300K, of course)! I guess being big and pretty on the surface is more profitable than modest and well-built:idontno:
     

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