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Thread: Big Home + Small Price = Cheap house

  1. #1
    Cyburbian PlannerByDay's avatar
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    Big Home + Small Price = Cheap house

    Not sure if this is really a good thing.

    A local developer who generally speaking develops nice home has started a new program called "Bigger Homes, Smaller Prices" and they are marketing the homes to young families. Furthermore, all the "BIG" homes are located in the Kalamazoo Public Schools school district thus making they eligible for free college tuition as a result of the Kalamazoo Promise.

    Their website states you can get a brand new home including building site for as little as $62 per square foot.

    While this is a realtively new program, Mrs. PDB and I have been looking into how they can do this. Not because we are interested in buying but because we are interested in construction, planning, and other reasons. Their website says they can due this as a result of a "BIG 10-point Value System" but after some talking to other developers and contractors we found they are cutting major corners.

    For example they are not putting swithced in the closet for the lighting. They are using cheap pull chain lights.
    They are not putting subflooring under the laminate flooring, they are just throwing it onto the OSB below,
    No eaves on the homes,
    No padding under the carpet,
    And everything is extra. You want them to rough in the plumbing in the basement for another bathroom. That will cost you $700.


    Personally I think this is going to kill the reputation of this company. It seems to me that they are putting their reputation on the line for a little short term financial gain.

  2. #2
    Unfrozen Caveman Planner mendelman's avatar
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    Possible ways is that the building sites have been acquired years ago when vacant parcels were very inexpensive, or that the builder is willing to make a very low profit margin on each house (less than 5%) and hopes volume will compensate, or the build quality is crap, or all the above.

    Seems like a good opportunity, but taken with a grain of salt.
    I'm sorry. Is my bias showing?

    Let's not be didactic in this profession, because that is a path to disillusion and irrelevancy.

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  3. #3
    Cyburbian jmello's avatar
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    Quote Originally posted by PlannerByDay
    They are using cheap pull chain lights.
    Hey, hey! Our condo in Boston was all pull chains. Of course, we had nice brass chains not strings, and the house was built before electricity was widely available.

    Wouldn't the lower cost of land in the city = smaller prices than the same house in the suburbs?

  4. #4
    Cyburbian
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    The constrruction savings you're mentioning couldn't drop the prices to $62 per sqft, what are the average finished price per sqft in your area?

  5. #5
    Cyburbian michaelskis's avatar
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    Looking at some of the specs, they are at the absolute minimum for the Michigan Residential Code, but it appears that it is still legal unless Kalamazoo or what ever township they are constructing in has different regulations. I know that our zoning code requires a bit more than that so they still build average to good quality homes in our community.

    However

    Most contractors are out to make a profit and many new homebuyers are looking to save a buck. Nothing wrong with that, but does it influences the quality of the structure being built. Yet many of the homes built after World War II don’t seem to hold up as well as homes that were built 100 years ago. I am worried that a significant portion of the homes constructed today are not intended to last 100 years.
    Last edited by michaelskis; 15 Feb 2006 at 11:02 AM.
    Not my monkey, not my circus. - Old Polish Proverb

  6. #6
    Cyburbian
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    they may be in at a very low land basis, which seems more likely to enable them to reduce price.

  7. #7
    Member CosmicMojo's avatar
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    Quote Originally posted by michaelskis
    I am worried that a significant portion of the homes constructed today are not intended to last 100 years.
    Most home builders spec the materials for a 20-year life.

  8. #8
    Cyburbia Administrator Dan's avatar
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    Quote Originally posted by michaelskis
    I am worried that a significant portion of the homes constructed today are not intended to last 100 years.
    A lot of houses built 100 years ago, or even 75, didn't last to this day. I'll refer you to a little place not too far from you called "Detroit."

    If a site-built house is properly constructed (for the climate and soil conditions of the site), regularly maintained, kept dry and heated, and continuously occupied, it should last centuries.

    There's no such thing as "20 year wood" or "20 year cabinets". It's expected that appliances will experience wear with use. Cabinets, sinks and the like will last forever, but they're usually be replaced long before they lose their utility because styles and tastes change. You might encounter short-lifespan specs on carpet and roofing, but they're not intended to be permanent, anyhow. I looked at a house with a slate roof. Almost maintenance-free, but when something goes wrong, it'll cost far more to repair than a tile, shake or shingle roof.
    Growth for growth's sake is the ideology of the cancer cell. -- Edward Abbey

  9. #9
    Cyburbian DetroitPlanner's avatar
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    I'd be worried about insulation too. Michigan already has crappy insulation requirements, which is insane when you think about how cold it gets here.
    We hope for better things; it will arise from the ashes - Fr Gabriel Richard 1805

  10. #10
    Member CosmicMojo's avatar
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    Quote Originally posted by Dan
    There's no such thing as "20 year wood" or "20 year cabinets"
    There is such a thing as a "20-year roof." Ask any residential builder. That's the exact terminology they use and it means what it sounds like. Most mass-market builders spec roofs that are built with materials that are expected to last only 20 years. Someone from one of the biggest builders in NoVa told me that. All the materials are chosen for cost rather than longevity.

    Now a custom builder would be a different case. You pick the materials and have total control over the quality.

    Look at a 30-year old house: it looks run down and falling apart. A 100-year old house ages much better. It was built with quality materials and standards and will last 5 times as long as a contemporary house.

  11. #11
    Cyburbian mallen's avatar
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    Quote Originally posted by CosmicMojo
    Look at a 30-year old house: it looks run down and falling apart. A 100-year old house ages much better. It was built with quality materials and standards and will last 5 times as long as a contemporary house.
    Not to quibble, but if you are looking at a 100 year old house, then you are looking at a well built house. But there are thousands of others that fell by the wayside over the years - a bunch of poorly built 100 year old houses.

    It follows that there will be houses built in 2006 that will last 100 years and people then will be saying, "they sure don't build em like they use to, just look at the houses that are still standing from 2006." But we all know that many of the circa 2006 houses will have fallen apart too by then.

  12. #12
    Cyburbian michaelskis's avatar
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    Quote Originally posted by Dan
    A lot of houses built 100 years ago, or even 75, didn't last to this day. I'll refer you to a little place not too far from you called "Detroit."

    If a site-built house is properly constructed (for the climate and soil conditions of the site), regularly maintained, kept dry and heated, and continuously occupied, it should last centuries.

    There's no such thing as "20 year wood" or "20 year cabinets". It's expected that appliances will experience wear with use. Cabinets, sinks and the like will last forever, but they're usually be replaced long before they lose their utility because styles and tastes change. You might encounter short-lifespan specs on carpet and roofing, but they're not intended to be permanent, anyhow. I looked at a house with a slate roof. Almost maintenance-free, but when something goes wrong, it'll cost far more to repair than a tile, shake or shingle roof.
    That is a very good point. It is a shame that many of those homes have fallen to disrepair.
    Not my monkey, not my circus. - Old Polish Proverb

  13. #13
    Quote Originally posted by CosmicMojo
    Look at a 30-year old house: it looks run down and falling apart. A 100-year old house ages much better. It was built with quality materials and standards and will last 5 times as long as a contemporary house.
    You're making a sample selection error called survivor bias. A 100-year old house ages much better because those homes that have survived for 100 years are more likely to be built to age well simply by the fact that they have lasted so long. Houses built 100 years ago that didn't age well have long been demolished and replaced.

    There's still a lot to learn about constructing a good house, but the problem is that the buying public has been brainwashed into thinking that "real estate always goes up" when in fact it depreciates just like any other asset. How can you convince buyers to spend extra for additional longevity when they are convinced that no depreciation will take place?

  14. #14
    Cyburbian
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    I think they must have obtained the land for nothing. How much does a couple of pull chains save you on an average size house, $50-60? I am sure that homes built in the last 30 years will last a long time. They may not age well (siding rusts, stucco cracks, etc), but building codes have much tighter requirements then they did 100 years ago. One of the things that I think helps older structures is that lumber used to be true sizes, so a 2 x 4 was actually a 2x4, not 1.75 by 3.5 so that they are stronger. On the down size, my floor joist were not attached to the main support walls with anything other than 2 nails per joist A few hurricane clips and I think I just added another 100 years to my house. I am also betting that the trees were old growth, which I think is considered to be stronger wood? I have been remodeling my 1930's home, and tying into existing walls has been a real pain in the ass due to the differences in the original lumber and the new lumber. The amazing thing is that I live on a hill, on a major fault line, and my brick structure does not have a single crack.

  15. #15
    Cyburbian Luca's avatar
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    My house is 101 years old but it's had work done to it, including some minor structural work (London houses from the Edwardian period have minimal foudnations, when the caly soil shrinks you can get cracks, etc), roof re-pitching, etc.
    Life and death of great pattern languages

  16. #16
    Cyburbian Random Traffic Guy's avatar
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    Quote Originally posted by cololi
    I think they must have obtained the land for nothing. How much does a couple of pull chains save you on an average size house, $50-60?
    It's not the pull chains and switches that cost $$, but the wiring installation between the socket and switch. Pull chain simplifies everything quite a bit in that area.

    I'm not seeing $62/sf for a basic house as some absurdly low price. Seems about right to me for this area at least (normal houses for $75/sf, very nice for $80s/sf). In fact would probably expect to get switches for $62. Set floor plans, being builder and developer, probably tiny lots, all advantages.


    edit: checked their page, they've got one house listed for $67/sf, and the rest are mid 70s and up.

  17. #17

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    Quote Originally posted by mallen
    Not to quibble, but if you are looking at a 100 year old house, then you are looking at a well built house. But there are thousands of others that fell by the wayside over the years - a bunch of poorly built 100 year old houses.

    It follows that there will be houses built in 2006 that will last 100 years and people then will be saying, "they sure don't build em like they use to, just look at the houses that are still standing from 2006." But we all know that many of the circa 2006 houses will have fallen apart too by then.
    I agree. EXCEPT-the wood generally available to modern builders is nowhere near the quality of the wood from virgin forests. This is especially true in the west, where we no longer have cheap, high quality, virgin redwood for us in even workingmans' cottages. You can make up for it through technology, but some of these engineered products have not been time-tested.

    Detroit is correct, though, in that there are plenty of shoddy houses built during the growth spurt of the early industrial age. Detroit is just Los Angeles 50 years older.

  18. #18
    Cyburbian jread's avatar
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    Quote Originally posted by cololi
    I am sure that homes built in the last 30 years will last a long time. They may not age well (siding rusts, stucco cracks, etc), but building codes have much tighter requirements then they did 100 years ago.
    Agreed. Even our "spec-home" is quite solid and I'm impressed with it. The front and sides are 6" (or thicker) flagstone and the rest of the exterior is Hardie Plank (doesn't rot, doesn't burn, termites can't eat it, doesn't need to be repainted very often, and counts as "four-side masonry" for insurance purposes). It's also very energy-efficient with great insulation, Low-E windows, etc. I think it will last awhile
    "I don't suffer from insanity... I enjoy every single minute of it!"

  19. #19
    Cyburbian
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    Quote Originally posted by Random Traffic Guy
    It's not the pull chains and switches that cost $$, but the wiring installation between the socket and switch. Pull chain simplifies everything quite a bit in that area.
    I am very familiar with wiring requirements. Still, a switch requires one (maybe 2 depending on the type of fixture) additional box (total of $2), maybe 10 feet of wire $10, a switch ($1), and that is about it. In new construction, an electrician will knock one of these things out in 5 minutes. Not a great deal of savings.

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