Tear down and build larger vs rehab and sell?

[Lorin K.]

Seems this is the trend in more expensive cities like Seattle and in Vancouver. Doesnt this go against the grain of investing in income properties? What happens when the economy turns sour and the vacancy rates drops and total stock for homes for sale in a town increases? Also, what is the reason why these houses look like a box instead of traditional slopped roof style?

http://www.seattletimes.com/seattle-news/data/teardown-town-1500-small-houses-replaced-by-giants-since-2012/

[J Scott]

People that are tearing down small houses and building large houses aren't in it as a long-term investment that generates monthly income.  They are building the larger houses and selling them to people who are moving into them, so future vacancy rates don't apply.