muzie_IHB
New member
<p>So I've seen it stated here that it costs homebuilders around 150$/sq.ft to build here, which seems roughly in line with the nation average. Yet these houses are being sold for something in the order of 400$/fq.ft. for a very hefty 63% profit margin.</p>
<p>In any competitive market I would have expected these fat margins to immediately draw out other homebuilders here, bringing prices down over time until the margins are more reasonable. Basic market forces at work. Yet, this is not happening. I understand Irvine itself is special because of the TIC cartel and the special monopoly that it enjoys, but why aren't the neighboring areas faring any better? In any other region I would have expected small contractors to pop out to drive the margins down - or at the very least prospective homebuyers would have bought land and hired contractors themselves. Anyone care to offer any theories? Or is my reasoning faulty?</p>
<p>Regards,</p>
<p>Muzie </p>
<p>In any competitive market I would have expected these fat margins to immediately draw out other homebuilders here, bringing prices down over time until the margins are more reasonable. Basic market forces at work. Yet, this is not happening. I understand Irvine itself is special because of the TIC cartel and the special monopoly that it enjoys, but why aren't the neighboring areas faring any better? In any other region I would have expected small contractors to pop out to drive the margins down - or at the very least prospective homebuyers would have bought land and hired contractors themselves. Anyone care to offer any theories? Or is my reasoning faulty?</p>
<p>Regards,</p>
<p>Muzie </p>