Tuesday, March 15, 2016

The flood of Chinese money into Bay Area housing is coming not just from home buyers.

Chinese developers musclingin to San Francisco Bay Area housing market.
The only U.S. metro area attracting more Chinese development dollars between 2013 and 2015 was New York and its boroughs. Let's see why it is happening. Landsea Holdings have gotten the land for $186 million. Assuming the plan to have 450 town homes remains the same - and that may be something of an assumption - that makes their land acquisition costs $415,000 per unit There is no doubt demolition and clearing which has to happen first - is that perhaps what another $10 million? Call that $20,000 per unit. We'll assume the site is otherwise "clean" and doesn't need environmental remediation. And then there will be the building costs. I have no idea what those would be, but I wouldn't be surprised if it was at least $200,000 per, unit so now we are talking about $615,000 per unit in costs. I am assuming that is a very low estimate. Landsea Holdings are entitled to seek profit, so I doubt we are looking at anything less than $900,000 per unit, and I wouldn't be surprised at all if they were more like $1,000,000 plus HOA fees.

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