Construction costs down 15% - 25%

Times have been tough for homebuilders these days. Sales have fallen to their lowest level in decades. And the buzz of saws and staccato beat of hammers are sounds seldom heard as production rates drop to lows not seen since World War II. But developers are benefitting from a little reported side-effect to the housing slump: It's cheaper now to build a home. Builders say construction costs are down 15 to 25 percent. That translates into an average cost of $100,000 to $140,000 for just the "sticks and bricks" (without land) for a modest, 2,000-square-foot house. That same house cost $140,000 to $190,000 to build during the peak of the housing boom just four years ago. Builders from Fort Worth's D.R. Horton to Arizona's Meritage Homes and Newport Beach's William Lyon Homes have crowed in recent earnings reports about improved profit margins due to construction cost savings. The savings could benefit consumers as well when passed on through lower prices, some industry officials say. But the news isn't so ... Read the rest of entry »