Terrel L. Shields
Elite Member
- Joined
- May 2, 2002
- Professional Status
- Certified General Appraiser
- State
- Arkansas
For 2 years, I've done a series of houses that are 2 bed 2 bath low cost (by most standards), metal clad siding and roof with CHA, laminate floors, stock RO, DW, MW. Small. Last year the builder expanded by 350 SF and they are now 3 bed, 2 bath. I now have 5 larger and 8 smaller homes of those that have sold and have several more under construction.
Running the cost approach backward on the sales, I am consistently getting 27-30% EP. That's a healthy profit margin. They go up quickly and I can think of several small towns (this in NE Okla) that could probably absorb similar affordable housing (these sell for well under $200k.) I would think the big builders trying to sell the $400,000 house would be at far bigger risk. Just saying...
Running the cost approach backward on the sales, I am consistently getting 27-30% EP. That's a healthy profit margin. They go up quickly and I can think of several small towns (this in NE Okla) that could probably absorb similar affordable housing (these sell for well under $200k.) I would think the big builders trying to sell the $400,000 house would be at far bigger risk. Just saying...
