It’s pretty simple: The cost to make the structure of a house is pretty much the same for luxury or basic models: Framing, electrical, foundation, etc.
But if you throw in some cheap granite countertops, a fancy tub, and up-market flooring suddenly it’s a luxury house and you can charge twice as much, despite it not costing nearly twice as much to build.
Same thing goes for cars: A luxury car just has different fabric and some badges, but they charge way more than a comparable econobox because it’s “luxury.”
fhqwgads@possumpat.io 10 months ago
From what I’ve seen this has been turned upside down by… well essentially automation, just not the kind everyone is afraid of.
Between better techniques and tools, a lot of construction is significantly faster than it used to be, to the point that a job that’s smaller has enough… I guess “opportunity” cost that it can be significantly less profitable.
Let’s say I’m a plumber. In the 80s, I would use copper pipe and have to solder all the connections - even a small job would take a long time - on the order of days. If I do a small house it takes way less time than a big house.
But now instead I would put in long lines of PEX with crimp on connectors. It’s like 4x as fast so it should be 4x cheaper right? Except now I have to drive to 4 different jobs to work all day, set up and tear down 4 times, deal with 4 different customers and invoices, etc. OR I can do 1 big house and make essentially the same money since I cut out all the extra work.
Add to that that most people are going to use more expensive finishes on larger houses that I basically just take a percentage of, and they might request something specialty and working on small affordable houses seems like a terrible business plan.