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roundearthervaxxer t1_j8qji03 wrote

Reply to comment by TheQuarantinian in Can 3-D Printing Help Solve the Housing Crisis? - Standard construction can be slow, costly, and inefficient. Machines might do it better. by speckz

Developers never undercut each other?

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TheQuarantinian t1_j8r4tvn wrote

Not like airlines or gas stations - you generally don't see price wars for a couple of reasons:

  1. You can't make more. You have only one shot to sell that specific lot
  2. Real estate opportunities are drying up: you'll probably never get another chance to build another sub in that division again unless you can do a lot of demolition
  3. If demand falls you just stop building and wait. Land doesn't expire or go out of style
  4. If you sell a unit for 100,000 then sell the one next door for 80,000 you affect the value of the first one and establish a trend that affects the value of the third one as fewer people want to buy in a neighborhood where prices are falling. Again, the best option is to just stop building rather than cutting prices. There are some exceptions here, mainly multi unit buildings where you have to pay for ongoing maintenance if the unit is occupied or not, but the are a bunch of other differences there.
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