New Home Prices:
There are many forces that influence the cost of a new home. Higher wages to attract employees into the trades and higher material costs are major forces.
However, the most critical force is the cost of creating a residential lot. Lot prices have increased to a point that it is almost impossible to build a new home in the “starter home” price range.
There are several forces that have combined to make residential lot construction cost be so high. Among those cost drivers are the land use regulations for new residential development, environmental regulations, the cost of the approval process, and cash proffers.
In some markets, the demand for residential lots is so much greater than the supply of lots that prices have increased to levels HIGHER than in the Bubble.