Hi, trying to make sense of what appears to be two contradictory sources of information re the cost of residential homes:
A) The NAHB surveys on final sale price of single family homes seem to indicate that as much as 59% of the cost can be attributed to construction costs. Finished lot cost only seems to contribute 20%.
B) Majority of econometric surveys on housing price either place the blame for high housing costs on either scarcity of land or overly restrictive zoning parameters.
(see for instance http://www.econlib.org/library/Enc/Housing.html)
What makes no sense to me with regards to B is that if the total land cost is only 20% of the final housing price, how can factors relating to land (either the impact of zoning / scaricty of prime land) be labelled as the main explantory factor in the varience of housing price? Any help on this would be much appreciated!