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Explain like I'm 5, why not build in higher COL markets?

The cost to build a home, at least material wise, is roughly the same nationwide.

Housing prices, however, are not.

So if a home averages $1M in CA, why aren't builders flocking there?

Assuming $150 per sq/ft, a 2000 sq/ft home would cost about $300,000 to build. If the same home could easily be sold for $1M, and maybe $100k for the land, that's quite a profit.

On the same page, in areas where home prices are the lowest in median price, like WV and MS, ($108 and $128k), what is incentivizing developers to build new homes if most people can buy a home much cheaper than a new one?

I'm also curious what is so marketable about new construction? In my area, the cheapest new construction home I could find in a development was $281,000, and only 3BR, 2BA, 2 Car Garage, and a small 1341 square feet GLA. Similar homes built since 1990 are selling for only $200-$220,000, and most of the new homes I see are pretty bare bones, I'm talking linoleum instead of tile, vinyl plank instead of real wood, laminate counters, totally unfinished basement, etc. The one for $200k had title and solid wood, hard wood trim around the floors, windows, etc solid wood cabinets, etc.

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source https://www.reddit.com/r/RealEstate/comments/o9s0cb/explain_like_im_5_why_not_build_in_higher_col/
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