[brudgers]

1. In successful businesses, lower costs usually correlate to greater profits not lower prices. This is particularly the case with the narrow section of the real-estate market that is single family housing (single family housing is about the lowest and worst use of real-estate (i.e. the opposite of highest and best use)).

2. Single family home construction in the US is highly prefabricated. You can go into any Home Depot and get lumber, fasteners, fixtures, appliances, and anything else you need to build a house. All of it movable and installable without much mechanization beyond a truck (and Home Depot will rent you one of those).

3. Tearing down existing houses for replacement only makes economic sense in two cases. The first is when the value of the land justifies more expensive construction (e.g. MacMansions). The second is when redevelopment is not for the market (e.g. Habitat for Humanity).

4. It is a mistake to look at construction as inefficient. Construction is just one component of real-estate markets.

5. We have very efficient prefabricated housing. It tends to look like mobile homes.

6. Wealth preservation is the primary function of the real-estate industry. Buying and selling for profit is the low end. The real money in real-estate resides in income producing property not single family houses.

[eightysixfour]

> 3. Tearing down existing houses for replacement only makes economic sense in two cases. The first is when the value of the land justifies more expensive construction (e.g. MacMansions). The second is when redevelopment is not for the market (e.g. Habitat for Humanity).

Interesting you chose “MacMansions” as the example instead of increased density. In my (very) urban area they tear down single family homes and replace them with 6-9 town homes.

[brudgers]

I chose MacMansions because it was clear and ordinary and uncomplicated.

Building a six pack is driven by the same basic economic condition, the existing building is economically obsolescent.