New Home Sales up 15% YoY and 4.4% from October to November

[Jordan]

Replacement value matters because it means no one will be producing new supply until existing homes rise in price over and beyond the replacement value. No one builds $100,000 homes when the same home is available for sale for $50,000. Hence, replacement value is important for holding down supply until prices can catch up.

[cbc58]

Replacement value matters because it means no one will be producing new supply until existing homes rise in price over and beyond the replacement value. No one builds $100,000 homes when the same home is available for sale for $50,000. Hence, replacement value is important for holding down supply until prices can catch up.

wrong.

[Jordan]

wrong.

Entirely. Why buy a $100k home when you can build the same one for $200k?!?

[cbc58]

stop. please.

[Jordan]

stop. please.

Use more words. "Wrong." and "stop. please." don't really help move the discussion.

How dumb do you think people are to believe it's common practice to build a new home for $200k when the same home can be had without waiting for $100k?

[Zippyjuan]

As long as somebody thinks that they can sell a new home for $200k, they will build a $200k home- even next to $100k homes. Otherwise all new homes would only be worse (cheaper) than the ones already there. There would never be any "upgrades" built.