It's similar to luxury cars - the "luxury" part doesn't necessarily cost a lot more (but yes does cost a bit more) but it can be marked up a lot, lot more.
This is also correct, but there is an additional twist to it.
Non-luxury may be not marketable (besides bringing less margin).
It is a curious market, I have seen more than one case of building companies that were put on their knees by the lack of buyers because they built "too basic" houses, believing that the relatively low price would have procured lots of willing buyers and this simply didn't happen, and they had to apply rebates over rebates, thus losing money in real terms to be able to sell them (if/when this actually happened).
Comments
This is also correct, but there is an additional twist to it.
Non-luxury may be not marketable (besides bringing less margin).
It is a curious market, I have seen more than one case of building companies that were put on their knees by the lack of buyers because they built "too basic" houses, believing that the relatively low price would have procured lots of willing buyers and this simply didn't happen, and they had to apply rebates over rebates, thus losing money in real terms to be able to sell them (if/when this actually happened).