Thread: Realestate questions, am I the only one?

I doubt it, but I am having a hard time understanding how this is possible. Anyone with more insight/wisdom please feel free to offer:

So, my wife and I just finished our house and had the appraisal done. It came in $60k LESS than what the hard costs were to build it. This is the actually material costs, no Overhead/Profit, carrying costs or Markup.

I was the architect, GC and did all the finish work (Wd flooring, tile, trim, kitchen, etc.) as well as installing the security system, whole house stereo and milled all the hardwood floors.

We put down 20% of the total construction costs of our own money and then used the bank for the rest and still only ended up with less than a 95% LTV.

It's not like I bought a used car that lost 20% of its value the moment I drove it off the lot but how can I buy a stud for $2 then it only be worth $1.50?

I know, I know...market demand, surplus housing, etc. But I just can't come to grips that a house is worth less than the hard cost of its parts. I'm going to end up paying PMI on a house that I put 20% cash into and then killed myself to build sweat equity. It just seems crazy to me.

Rant off. Thanks for letting me vent