Ethics of Real Estate Investment, NIMYism and the Housing Crisis

In reply to GameboyRMH :

I can put you in your choice of 1970s houses FOR 1970s prices all day long.

Oh but wait, you want insulation, copper or pex pipes, copper wiring, and to not hear your neighbors fart? That's gonna cost a lot extra. 

In fact, from my experiences and house shopping, and continuing house shopping, it's cheaper to build new or buy new than it is to fix those ancient cheap houses. 

So right back where you started from. 

Affordable houses and properties are out there, but they need an unaffordable amount of work, because while pay rates have been fairly stagnant, nothing else has. 

Unless you're (royal you're not you specifically)one of those people that thinks everyone should live in a 850sqft box for optimal land efficiency, in which case you can get berkeleyed because no one should delegate how or where others live. 

In reply to SV reX :

Whats funny about this is they are bigger, but worse. Im pretty close to the home building industry from first time home buyer to crazy custom homes. I think people moving to smaller quality 1400-1800sf houses would greatly benefit them in energy, upkeep and purchase price.

Most customer's wants boil down to, as big as I can afford, filled with pretty things, and they dont really care about is it built well, will it still be here in 40 years.

Im an old home enthusiast, but it is refreshing when I start pulling an old home apart seeing the difference in quality between new and old homes, I dont think Ill ever own a home built after 1940.

A good illustration is just the quality of wood, pretty much every time they reevaluate strength of wood used in construction, they get downgraded. Stuff is growth much faster nowadays making it weaker and more apt to rot and insect damage. 

Someone I know is doing two custom homes right now, similar price ranges and two polar opposite customers. One is a small lot and the biggest house he can fit on, thats all he cares about, I think its gonna be about 4500 sf, other customer is doing about an 1800sf house and doing it as high quality as possible, paying very close attention to the structure, energy efficiency, and future proofing the house. The builder said he had forgot how few people care about getting a good house, said its pretty refreshing to have a customer that cares about the quality and doesnt have to sit and have super long debates about spending some money where it counts.

I see some correlations to the automotive world, I think unfortunately the market has mostly moved towards technology and the new shiny thing, with little care of reliability and running costs and the manufactures have given them what they want.

SV reX said:

The average new house size in 1970 was 1500 SF. The average new house size in 2014 was 2657 SF. 
 

They have bigger kitchens, more baths, and far more upscale devices. 
 

They SHOULD be twice the price. 

I think this is worth looking into more closely. Apart from the size issue which I've already mentioned does not pan out, if fittings and devices were an issue, the market would be clamoring for "stripper model" houses like those from the '70s - maybe one less bath, basic cheapo kitchen counters, no Cat6 in the walls, maybe take the AC out of the HVAC - for hundreds of thousands of dollars less somehow. That hasn't happened.

And the ultimate counterexample is cars. A modern car is so technologically advanced compared to one from the '70s that it would seem like it should come with a Starfleet badge, and it's likely to have twice as much material in it as shown on the scales, but it's still available for the same price adjusted for inflation.

I've pointed out some of the same things when I hear an argument I've nicknamed the "hidden value in technology theory" from tech bros arguing that their doordash drivers aren't really poor - because they have modern smartphones that would've cost a jillion dollars in decades past but are just a few hundred dollars now. They think everyone is rich now because of this hidden value that somehow isn't accounted for economically, which is just nonsense.

In reply to Toyman! :

Then some other tax will be added or raised.  There's no income tax in Florida but look at how much the property taxes are there in comparison to a state that does have income tax. 

The issue you're bringing up is totally separate and doesn't pertain to your point

Opti said:

In reply to SV reX :

Whats funny about this is they are bigger, but worse. Im pretty close to the home building industry from first time home buyer to crazy custom homes. I think people moving to smaller quality 1400-1800sf houses would greatly benefit them in energy, upkeep and purchase price.

Most customer's wants boil down to, as big as I can afford, filled with pretty things, and they dont really care about is it built well, will it still be here in 40 years.

Im an old home enthusiast, but it is refreshing when I start pulling an old home apart seeing the difference in quality between new and old homes, I dont think Ill ever own a home built after 1940.

A good illustration is just the quality of wood, pretty much every time they reevaluate strength of wood used in construction, they get downgraded. Stuff is growth much faster nowadays making it weaker and more apt to rot and insect damage. 

Someone I know is doing two custom homes right now, similar price ranges and two polar opposite customers. One is a small lot and the biggest house he can fit on, thats all he cares about, I think its gonna be about 4500 sf, other customer is doing about an 1800sf house and doing it as high quality as possible, paying very close attention to the structure, energy efficiency, and future proofing the house. The builder said he had forgot how few people care about getting a good house, said its pretty refreshing to have a customer that cares about the quality and doesnt have to sit and have super long debates about spending some money where it counts.

I see some correlations to the automotive world, I think unfortunately the market has mostly moved towards technology and the new shiny thing, with little care of reliability and running costs and the manufactures have given them what they want.

I have one of those Too big houses.  I built it myself ( no contractors, a few helpers when required). 
  I built it as a Multi generational home. But both Daughters  moved away.  
   It's built with old growth hardwoods.  Locally sourced.  In fact most of the construction materials came  within 100 miles. 
 

In reply to GameboyRMH :

This is also assuming the market is being driven by logical choices, which it isnt, or houses wouldnt have almost doubled in size since the 70s. Status symbol type stuff is what sells most houses. Would we have had a massive housing crisis a decade ago if people made informed logical decisions.

Its the same with cars, people used to care about reliability and it drove the market (and lead to toyota getting their reputation), nobody cares anymore, cars are less reliable and more expensive to repair than they were 10-20 years ago, and people consider them appliances to be replaced every 4 or  5 years. They want a status symbol packed with technology their friends dont have, and theyll neglect it for the next 5 years and the first big repair bill trade it in. This isnt everyone but I believe its most people and the market driver.

Also there is a point in the "tech bro" arguments. I read if you are born in the US and in the poorest group in the US you are still in the top 1% in the world.

In reply to frenchyd :

I also have a too big house, its like a project car to me though. I do miss my small old home sometimes though. Id be nice if more houses were built like this though.

GameboyRMH said:

SV reX said:

The average new house size in 1970 was 1500 SF. The average new house size in 2014 was 2657 SF. 
 

They have bigger kitchens, more baths, and far more upscale devices. 
 

They SHOULD be twice the price. 

I think this is worth looking into more closely. Apart from the size issue which I've already mentioned does not pan out, if fittings and devices were an issue, the market would be clamoring for "stripper model" houses like those from the '70s - maybe one less bath, basic cheapo kitchen counters, no Cat6 in the walls, maybe take the AC out of the HVAC - for hundreds of thousands of dollars less somehow. That hasn't happened.

 

Are you sure?

I see a lot of evidence of this happening.  Build a 2600sq ft box.  And I mean box like a cube with almost equal sides (cheapest way to enclose maximimum volume), with the lowest quality carpet, linoleum, kitchen, etc. all part of it.  They aren't cutting back on space, but they are cutting back on just about everything else.  This is the most risky part of the market IMO.  It'll need $25k in refurb in 10 years, but the owners got in for $5k less up front.

In reply to GameboyRMH :

Just like the market is clamoring for "stripper model" cars?

Right.

Let's also mention that in addition to being twice the size, a modern home is about 5x as energy efficient on a per-sq-ft basis.

The other factor you're ignoring in your mythical "should be" is that anywhere desirable to live has been heavily built out in the last 40 years, making further development more expensive.

Plus there's a whole host of increasing infrastructure impact fees and corollary work you're not accounting for, like sewer and traffic improvements.  Storm water management on a neighborhood or individual property basis wasn't a thing 40 years ago. It was an afterthought.  Now it has significant and often expensive requirements.

Opti said:

In reply to SV reX :

Whats funny about this is they are bigger, but worse. Im pretty close to the home building industry from first time home buyer to crazy custom homes. I think people moving to smaller quality 1400-1800sf houses would greatly benefit them in energy, upkeep and purchase price.

Most customer's wants boil down to, as big as I can afford, filled with pretty things, and they dont really care about is it built well, will it still be here in 40 years.

Im an old home enthusiast, but it is refreshing when I start pulling an old home apart seeing the difference in quality between new and old homes, I dont think Ill ever own a home built after 1940.

A good illustration is just the quality of wood, pretty much every time they reevaluate strength of wood used in construction, they get downgraded. Stuff is growth much faster nowadays making it weaker and more apt to rot and insect damage. 

Someone I know is doing two custom homes right now, similar price ranges and two polar opposite customers. One is a small lot and the biggest house he can fit on, thats all he cares about, I think its gonna be about 4500 sf, other customer is doing about an 1800sf house and doing it as high quality as possible, paying very close attention to the structure, energy efficiency, and future proofing the house. The builder said he had forgot how few people care about getting a good house, said its pretty refreshing to have a customer that cares about the quality and doesnt have to sit and have super long debates about spending some money where it counts.

I see some correlations to the automotive world, I think unfortunately the market has mostly moved towards technology and the new shiny thing, with little care of reliability and running costs and the manufactures have given them what they want.

Yeah I bought a house built in 1958. We have had seemingly fewer problems that required repairs then many of our friends who have much newer houses built in 1990s-2010s. However, our house certainly isn't nearly as energy effecient and the downstairs is cold in the winter and the upstairs is hot in the summer. The main floor is decent year round (split level).

docwyte said:

In reply to Toyman! :

Then some other tax will be added or raised.  There's no income tax in Florida but look at how much the property taxes are there in comparison to a state that does have income tax. 

The issue you're bringing up is totally separate and doesn't pertain to your point

Or we could have no taxes. Wouldn't that be a novel idea?

RevRico said:

Unless you're (royal you're not you specifically)one of those people that thinks everyone should live in a 850sqft box for optimal land efficiency, in which case you can get berkeleyed because no one should delegate how or where others live. 

Lol, this entire thread is based off of people delegating what others should do with property they own.

In reply to Toyman! :

But how else would the government be able to not pay back the federal reserve for all the money that pull out of thin air and lend to us at interest?

RevRico said:

In reply to GameboyRMH :

I can put you in your choice of 1970s houses FOR 1970s prices all day long.

Oh but wait, you want insulation, copper or pex pipes, copper wiring, and to not hear your neighbors fart? That's gonna cost a lot extra.

I didn't mean an actual '70s house, I meant something like the modern equivalent of a '70s house in size and content. We should be able to use decent modern insulation and piping since the materials should be obtainable for relatively similar prices, again see the car example.

RevRico said:

In reply to GameboyRMH :

Unless you're (royal you're not you specifically)one of those people that thinks everyone should live in a 850sqft box for optimal land efficiency, in which case you can get berkeleyed because no one should delegate how or where others live. 

I'm definitely not a fan of urbanism. If you like living in cities, cool, you do you. If you think everyone should be packed into a city for the greater good, you'll sound like a character from a Borg backstory series.

RevRico said:

In reply to Toyman! :

But how else would the government be able to not pay back the federal reserve for all the money that pull out of thin air and lend to us at interest?

The favorite things I get for my tax dollars are infrastructure and civilization.

In reply to 93EXCivic :

My house is built with old growth hardwood (locally sourced)  in the summer it's comfortably cool without A/C  until temps exceed High 80's.  In the winter with -40 f cold days  the house  will cost only $300 a month to heat when my neighbors with similar sized homes spend more than $1000 ( and I have 105 windows ) 

The difference is ICF's and SIP's. Oh and Modern windows. 

In reply to GameboyRMH :

I live on a 50' wide lot. All major sports are 30 minutes away.  Colleges and universities are near too!  Hospitals and health care, major shopping ( for car parts;-)  theaters and concerts, opera, orchestra, museums and galleries  Ferrari, Aston Martin, Bentley a couple Jaguar, aw heck every dealership.   Better paying Jobs than most rural areas,   
  Plus 10 minutes away are farms and rural areas . 

GameboyRMH said:

We should be able to use decent modern insulation and piping since the materials should be obtainable for relatively similar prices, again see the car example.

This sentence right here proves you know literally nothing about the construction industry.

Good Day, Sir.

Frenchy, please do us all a favor and discuss the topic at hand, and skip all the irrelevant humblebragging about your fancy house in your fancy neighborhood.

IMO I do have to say that I think that some places could do with a zoning update. I don't see why smaller houses/lots and townhouses aren't allowed more places (particularly big cities). There are definitely people that would chose to live in neighborhoods that allowed for walkable and bikeable neighborhoods even at the expense of room. But those neighborhoods often can't be built in current day America. I am pretty sure there is demand for this style neighborhood because in many cities, older neighborhoods like this are in pretty high demand. Also it allows for more efficient building. That is not saying that it should be required or encourage by tax code but I don't see why these neighborhoods can't be built more frequently in urban areas.

Duke said:

GameboyRMH said:

We should be able to use decent modern insulation and piping since the materials should be obtainable for relatively similar prices, again see the car example.

This sentence right here proves you know literally nothing about the construction industry.

Good Day, Sir.

I'm willing to learn, could you point me in the right direction to learning how the plumbing and insulation that goes into an average modern house has a massively higher inflation-adjusted value than what would've been used in an average '70s house?

From my experience with automotive plumbing, I'd guess that you could plumb a house with Aeroquip Startlite and reusable AN fittings for under 5 digits in materials.

Edit: This is the longest-term graph I've found, which apart from the obvious pandemic spike, shows pretty stable prices:

Edit2: From what I can find, an average house's plumbing hardware is around $6k today and insulation is around $3k, which adds up to a rounding error on a modern house's price.

In reply to Duke :

I think about this sometimes. What does this increase in efficiency cost in the long term.

Lots of worries about the chemicals in spray foam, and the problems weve seen with actually making a house air tight (humidity, mold and mildew)?

Does anyone actually repair modern windows, can you? Vinyl isnt really a long lasting material. My 150 year old wood windows I can pop off and repair in a day or two, and with copper seals on the side and the addition of some weatherstripping they meet the most recent (last I looked) energy efficiency specs.

Modern AC units dont last, sure they are more efficient, but consensus in the industry is after probably 10 or 15 years, throw it away and get a new one

Im really not a fan of modern appliances. I bought the current house with a 2400 dollar 2 year old dish washer already installed, a year into it ownership, the sump cracked (its plastic) and I could not get one. Ordered 2 or 3 and each time my money got returned and I was told its back ordered. I went to an appliance store and told the guy I didnt mind paying for a good one but I didnt want to have to replace it in a few years, and Id really prefer a metal sump. He said the best I could do is buy from a brand that supports their components and is relatively reliable, and all sumps were plastic now, including many of the tubs on cheaper washers.

I like old appliances and most people think they are energy hogs, my appliance guy told me that reputation comes from old wore out appliances and they really werent that bad when in good shape. I have a 1950s hotpoint fridge in my garage that still works, the compressor pulls 3.5 amps when running and if the seals are in good shape it doesnt run that often. Old houses only had 60 amps of supply generally, you couldnt pull a ton of energy to run an appliance back in the day. You get a 50 year old fridge with worn out seals it will run continuously though. I think part of old homes being unnefficient is partly like this. If an old house is crooked and nothing lines up, its not going to be very efficient today, BUT if its in good shape with good weather stripping its probably not as bad as most people think.

I worry more about energy costs where Im living than how energy efficient my house is. I can make my house more efficient, I have a much harder time making my energy cheaper.

frenchyd said:

In reply to 93EXCivic :

My house is built with old growth hardwood (locally sourced)  in the summer it's comfortably cool without A/C  until temps exceed High 80's.  In the winter with -40 f cold days  the house  will cost only $300 a month to heat when my neighbors with similar sized homes spend more than $1000 ( and I have 105 windows ) 

The difference is ICF's and SIP's. Oh and Modern windows. 

93EXCivic said:

IMO I do have to say that I think that some places could do with a zoning update. I don't see why smaller houses/lots and townhouses aren't allowed more places (particularly big cities). There are definitely people that would chose to live in neighborhoods that allowed for walkable and bikeable neighborhoods even at the expense of room. But those neighborhoods often can't be built in current day America. I am pretty sure there is demand for this style neighborhood because in many cities, older neighborhoods like this are in pretty high demand. Also it allows for more efficient building. That is not saying that it should be required or encourage by tax code but I don't see why these neighborhoods can't be built more frequently in urban areas.

 

Recent housing developments do have walkable/ bikeable  neighborhoods. It's just the streets after the evening rush. Because they are basically vacant from traffic. 
  Do you mean walk to the local grocery store, or restaurant?  Well those have pretty much been replaced with big box stores and fast food even in the city centers. 

A few points I like to point out. That old house vs new house thing is certainly dependent on each family's needs and wants. You can't decide for others how much space they need vs wasting. That's such a narcissistic way of thinking. 

Where I live new houses and old houses are the same price. Often old houses being more expensive because they're closer to downtown or in downtown. I could move my family of 3 into a 1400 sq ft home for $750k and we'll fit but all our E36 M3 won't. OR I could move them into a 3500 sq ft home for $800k that's 18 miles away. Do what works for you. 

My issue with old houses: They are almost always 2 bathrooms short. 1.5 bathroom for 3 bedrooms,  NO.  2 bathroom for 4 bedrooms, ABSOLUTELY NOT. For me it's a must to have a toilet for each shiny happy person living in the house plus one if possible. Also, they are not energy efficient as new houses, very annoying to me. The they were built better 80 years ago argument doesn't really hold up. Yeah they were built well but now they have 80 years of wear and tear, 5 families, and who knows in deferred maintenance and neglect. They often have questionable floor plans and noisy windows. And pest tend to have already claimed their portion of the property.

I think we should practice minding our business.

We have some sayings:

"don't be counting another mans pockets"

 "worry about your own bag"

 "stop hatin"