proffessor keen, page-6

40% price drop prediction.

ie...

Lets say a newly built house/land.........

current value 400k.

Land component is valued at say $180k

The builders cost is 180k.

Buyer pays $220k for the end product.



House prices drop in value in by 40% to 240k in 12 months


Would the house not still cost 180k to build or will the price come down at the same rate the house prices drop?

Will steel... bricks.....wood..... labour prices come down at the same rate?


So at $240k .......assume the house costs the same to build .....then the land value has changed from 180k to 60k?


Or what if the land stays the same price but the house value comes down to $60k.


So builders will have to build houses for $40k to make a profit?


If no new houses are built....which they wouldnt be given that scenario....then where will we all live?


Perhaps I should invest in a tent and caravan business?

lol......any comments?