General education about how real estate development works. Not an offer to sell, or a solicitation of an offer to buy, any security, and not investment, legal, or tax advice.
The short answer: carry cost is what it costs to hold a project over time, mostly loan interest, property taxes, and insurance. It runs until homes can legally close, which in Seattle is often well after construction is finished.
What carry cost includes
- Interest on the construction loan, which grows as more of it is drawn
- Property taxes on the land and improvements
- Builder’s risk and liability insurance
- Utilities, security, and site upkeep while homes wait to close
None of these care whether work is happening. A month of delay costs roughly the same whether the crew is busy or the project is waiting on the city.
The clock that does not stop at construction
For homes on one parcel that will be sold separately, Seattle requires a unit lot subdivision to create the individual lots. A house can be finished, inspected, and staged before its lot legally exists. On one of our recent projects, that subdivision took 225 days from submittal to recording with King County.
Until it records, the homes cannot close, and carry cost keeps running. Treat it as its own line in any schedule, not a footnote.
How careful projects manage it
- Start the subdivision as early as the code allows, alongside the building permits
- Count review cycles realistically, not optimistically
- Carry a schedule contingency, not just a cost contingency
- Track submittal dates from intake, not from when a record number first appears
Time is a cost. A budget that looks fine on paper can fail on the calendar.
Part of Development, Explained. Start with the full guide, How a Seattle Home Gets Built, or read Debt and Equity, Carry Cost, and Reading a Pro Forma.