The position that it's the fault of appraisers is scapegoating. The builders are in charge of the price they set to market along with the developer owner and the financers. Yes, cities and local governments have a piece of the blame with their development fees on the land before even a shovel is applied, but that's $25,000 to $40,000 of the price that pays for everything publicly accessible in the neighborhood for the next decades. So it's expected.

Beyond the cost of build, the profit margin of housing construction is insane gouging with controlled supply choked on purpose. 100 homes could be put out in a subdivision, but instead it's ten to keep to maximum price points in place via short supply. That's not an appraisal issue, it's market manipulation. Could consumers go elsewhere instead? Technically yes, but in practice who is going to uproot and leave their job in one region to get a home $200,000 less in another? Very few, especially with families. The argument builders make is that their profit margin from a home sale isn't that much, 20% gross and less than 9% net. So, on a home today of $600,000 that's $120,000 and under $60,000. What those same builders and developers are not saying is that they use an aggressive vertical model where they company owns all elements of the build, from financing to the drywall crew, thereby controlling their operating cost and adding to company covers. So is it really a net 9% or more like 30%? Fuzzy math here in practice.

Cost source: https://eyeonhousing.org/2025/03/builders-profit-margins-improved-in-2023/