Developers seeking ways to dodge building costs
ReviewJournal.com - KB Home executive Christopher Stephens saw a dramatic shift in the local housing market two years ago. Stephens, recently speaking at a housing seminar held by the Urban Land Institute’s Las Vegas chapter, said several factors have combined with land costs to increase median home values from $150,000 five years ago to about $300,000 today.
Stephens reeled off a litany of expenses that compose the asking price for a house. And in every case, those costs have jumped exponentially.
Land costs contribute 34 percent to the price of a home; developable residential property in Las Vegas now commands $850,000 to more than $1 million. KB is paying 220 percent more for land today than it was in 2000, Stephens said.
Development costs, which include grading, road construction, utility installation and drainage, total 17 percent of a home’s price. Basic development activities at KB cost 65 percent more than they did in 2000.
At 41 percent, the cost of vertical construction contributes the biggest chunk to a house’s price. Expenses such as labor, building materials and taxes and fees have shot up a combined 45 percent since 2000, Stephens said.
“You can’t build today without charging more or building more units,” Stephens said. (Continue)