well the other part of the story is inflated home values...It's so mind boggling how a home built on one side of town will cost $325k, to build, but the same house, same builder, same blueprints, same materials, same labor, built on the other side of town is only $185k to build...

 

The other thing that just boggles my mind is how developers buy say a parcel of land that is 100 acres and subdivide it down to where each home site lot is like .08 acres ( just for example, some are more but .08 is not uncommon) and then charge $200k for the .08 acre lot and then you have to build a $300K house on it due to deed restrictions and the HOA only allows certain builders and certain home plans and designs...

 

That .08 acre is worth nowhere near $200k...In reality, it's only worth a few grand...Plus the homeowner has to pay to have utilities connected from the street to the home...The fact that a subdivision is being built IMO doesn't increase the value of the land that much...

 

Most developers build a certain amount of homes in the new subdivisions and then wait until someone buys another lot before they build another home, assuming that they don't want one already sitting there on the market for sale...It only takes ONE idiot to buy one of those $500k (lot plus home) homes and someone will say OHHHHH Frankie and Janie had a house built out in Po Dunk Holler, we better do that too and the race is on...

 

Then after a few years when the builder stops building with exception to newly bought lots, the county tax appraiser comes around and says....Ohhhh this subdivision didn't bring the expected amount of sales, so now your $500K home is only worth $XXX,XXX k and now the owners are upside down in their mortgage and stuck with zero equity and owe more on the home than they can ever get out of it... 

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