[andrewksu]

Most of the value is in the land, and the homes are no different than $200K homes in the midwest. However, they are worth more and cost more because of very high demand and limited supply of labor and land. Putting a standard new home on a property that just sold for $1.6M (a home that should, anywhere else cost $300K) allows you to flip that property for $3.2. That's in Redwood City in a decent, but not over the top (for the Peninsula) neighborhood. Same home in a different market is worth quite a bit more.

Bare minimum for non tract construction is about $250/sqft or 3x the rates in the middle of the country. For high performance homes, $600+ /sqft is not uncommon.

Construction is not perfectly competitive, especially here in the bay. Guys (builders/trades people) pick their rates because demand on them is so high. Regulation, permitting and crazy processes mean the barrier to entry are higher than ever before. It's not fixable with day labor and a spunky attitude.

That said, our current line is the Tesla Model S of homes, late next year we'll be able to offer our Model C range for a much broader market.

Thanks for the well wishes!