Where is new construction is actually cheaper?

[Austin Wolff]

Zillow has released a nice bar chart revealing places where new construction is actually cheaper than existing homes. 

(You can click on the image to see a bigger version in a new tab.)

Does any of this data surprise any investors?

[Dan H.]

I question how Zillow can obtain the cost of new construction.   There are so many items that go into the calculation and I would not trust self reported costs to the state for the property tax increase (for holds they will under report). 

Note existing home price is easy in my market.  Closed transactions are public record.   They can easily determine an areas PSF.   Calculating land value is getting more challenging due to consistently reduced number of infill open market sales, but still possible.

In general I would think the candidates for cheaper to build would mostly be the high PSF cities.