Houses cost too much!

bumpy

I did some poking around in Ye Olde Census, and in 2000 the median home price here was $118,000, and the median income was around $43,000. Real estate has gone up some since then, mostly from retirees and Yankees coming in and bidding up everything.

stever

Where's here?

Back in '75 or so I got my first house in TN for ~$19k. Zillow puts the tax appraisal at $102k today.

With the rise in the standard deduction, it's barely worth the tax break to carry a mortgage these days.

bumpy

Rural eastern Virginia.

pat

Yeah? Like Isle of Wight? Or maybe the eastern shore? Or where? I'm in Norfolk.

fintail

It's much worse on the west coast...Seattle area and BC Lower Mainland are insane. A house that was 20K 45 years ago can be 600K+ today.

Mr_Shiftright

You can't even find a house where I live for 600K, and the houses are not very big or elaborate. It's where they are sitting that makes them so expensive. A 1500 square foot, 2 bedroom frame cottage built in the 40s, basically a one-story ranch, can be worth 1.2 million, no problem. It's much smarter to rent.

fintail

It's not that bad here - yet. The house across the street from me, a 1050 sq ft 1950-ish cottage with decades of neglect, Zillows at about 650K. No view, no huge lot, nothing. I think the average in my zipcode is approaching 1M. Renting is the only option for most, that's why a block of houses will be torn down for condos or apartments. I still prefer this to a long commute.

It's funny too, if you drive 2 hours, you can get a decent little house for 100K. But, there's a reason for that.

Mr_Shiftright

I'm happy with the renting situation as it allows me to live in a house I couldn't possibly otherwise live in. When rent is about 1/5th the mortgage, it's got to be the bargain of the century. The landlord doesn't care, since he didn't put any value into the house since he bought it so many years ago. All that has "gone up" is the price. If a house becomes more valuable without any improvements whatsoever, this isn't an "investment", this is a speculation, like hog bellies or gold futures.

jipster

The Louisville housing market is one of the lowest in the country I believe. The median selling price is around $140,000... nicely loaded.

fintail

If my apartment building went condo, the mortgage would be about double my rent as well. This would still be cheap for the area, and not the worst deal - I would be tempted, even though it might strain my finances. I am a little leery of the local condo market though, with many new conversions and new construction, I think a saturation point might be met. It happened for condos where I used to live, they aren't appreciating nearly as fast as houses, as they once did.

Here, many people are betting their retirement on their house, it's more of a risk than anyone will admit.

fintail

I can't even imagine. 140K wouldn't get a garden shed behind a crackhouse here.

My ca. 600 sq ft apartment would bring about 250K as a condo, with the most modest upgrades.

okko1

in the area i live 150 is average 200 is movin up if you can commute 4 years ago i was offered a spot that had a modular home 80x32 with 40 acres and a 4.5 acre pond the house setting 1/4 mile from the road for 159 the neigbor spent 350 on his house with the comfort of knowing he will have some privacy for at least the next 20 years

fintail

Insane. They say we have higher incomes out here, but it does not make up for the housing cost. I can't imagine anything decent here for 150K...a dumpy 30 year old condo a 45 minute drive from work might hit 150 at the low end.

One good thing, the house my grandparents paid ca. 20K for around 1960 is worth something like 600K now. Sadly, no other family members live in this area, so no other big appreciation on my side.

okko1

i live in a small town in kansas where lets say building codes are not so restrictive. about 30 days ago the house behind me was demolished. today they started the grade work it is supposed to be a 3 bedroom bath and a half with two car garage. i will guess about 145-160 for the turn key.

Mr_Shiftright

That's interesting. The price variations are so radical in this country.

Interestingly I've read somewhere that historically real estate values have NOT gone up a lot in the past--these last 30 years are quite a glitch in the normal trend of real estate in the USA.

fezo

I wonder about that with the prices. My grandparents built a very nice house in 1928 for $6K. In 1952 my parents bought a considerably lesser house for $8K.

Nowadays either house will get at least $400K and they are both still in the family.

fintail

It was the same here, too. My great-grandparents bought a house in Seattle in 1950 for something like 8K. It was built in 1925, and cost something like 5K then. Not a special house, just a typical colonial-revival cottage. When my great-grandmother moved to a care home in 1999, the house sold for 250K, and it needed everything, they had never updated anything. Today, with renovations, it it is worth like 750K.

okko1

it was about 15 years ago when johnson county got the rush from new jersey. people were selling very modest homes back there and buying houses with 3500sqft. of living space and telling me of how they made enough on the house they sold to go about even on the new one back then the house would start at about 250 and depending on finishing options up to 350. lots for these homes were about 40. :shades:

Mr_Shiftright

Well much of the rise in prices is due of course not to the VALUE of the house going up, but rather to just the PRICE going up....it's the same basic $8K house and certainly it didn't have $392K in value-added improvements.

Which means that real estate is not an "investment" (value-added entity like a growing corporation's stock) but rather a speculation. This would explain the sudden glitch in real estate prices over the past few decades, and it's quite conceivable therefore, that like any speculation, it could just go POP at any time.

okko1

plumbing is snubbed and gas line in place grade read for footings. not sure yet of layout but i wish i had a picture of the place they tore down i guess it is poor boy urban renewal.

michaellno

I live between Denver and Co. Springs, and my house (7 years old, 3bd/2.5ba, 1600sf on a 5000sf lot) is worth around $210K.

My folks, on the other hand, live northwest of LA. They bought their house new in 1968 for $23K. It's now worth around $550K. It's 1450sf on a 7200sf lot - 3bd/2ba.

At the top of the scale is my sister and BIL - they live outside of San Diego. Bought their house (3000sf, 4/5bd, 3ba) 2 or 3 years ago for just under $500K, last time they had it appraised, it was valued at just over $900K.

stever

Folks over in the The Future Of The Manual Transmission got sidetracked talking about old houses and how they are better built than new cookie cutter ones. I'm not sure I agree with that.

My first house was a Tennessee summer cabin converted into a year round house that I moved into back in 1975. It was an early 40's house, and had lots of problems. The tub always stopping up was memorable, as was the orange shag carpet in the den. Great neighbors that I still keep up with after living there 3 years.

Next was a small brick ranch from the 50's that was solid, if nondescript. Not having to paint was a plus. Then it was a 1954 ranch in Anchorage that apparently used old concrete forms from the nearby army/air force bases for lots of the studs. The roof was stick built from 2x4's and I had to shovel it whenever the snow got a foot deep - didn't trust that it could handle the snow load. Great little house for 15 years, and more wonderful neighbors, but iffy construction.

Then we got a 1929 era full basement job here in Boise 7 years ago, complete with a couple of runs of knob & tube wiring. Well built and within walking distance to downtown, but chopped up and uncomfortable. The upstairs bath was so small you couldn't fully open the door! But I didn't have to do any work on it at all.

We moved in a year to a 1974 ranch that's bright and open, with cathedral ceilings under a (new) hot roof. It's an owner built kit and we got a deal on it "as is" - I keep waiting for the attached garage to pull away and fall down the hill (more great neighbors here too, including one guy who owns a crane that could come up and pick my garage up for me, lol).

The next buyer will probably scrape it and it won't be too much longer until the 1.5 acres it sits on will appraise for more than the house. I like everything about it (except the stairs), but the maintenance of the house and pasture are wearing me down fast.

qbrozen

hmmm... i'm not a financial wiz, so bare with me. Is this value/price argument applicable to everything other than, let's say, a corporation that absorbs other entities? I mean, I guess that's true, right? Anything like gold, oil, etc, are all based on prices, not value. What is real value, anyway? Heck, land is more valuable to me than gold, yet I'd have more buyers for my gold and, pound for pound, its far more expensive.

Anyhooo... as long as employment doesn't drop in the toilet, I don't see property values necessarily "popping." Cooling off? Sure. We've already seen that happening. I mean, it couldn't keep climbing forever.

I think we made our housing moves at real good times (I hope). Bought the first one in Summer of 2000 for $155k. It was a little Cape Cod in a nice little town within 90 minutes of Manhattan. Sold it in Summer of 2004 for $280k. So that's a little more than 15% per year. Its worth about $325k now, so that's only been around 5% per year since we sold it. Sounds like the right move.

We sold it to buy a house for $400k. Very rural area about 15 minutes south of that town with our Cape Cod. 4-bedroom 8-year-old colonial on an acre. Just before the market cooled, it was appraised at $525k. A little under 10% per year, but still pretty good. Will it drop? Maybe. I'm not terribly worried about it because I don't plan on moving. Its exactly what I want. Of course, the real fear is if the housing market DOES plummet and then, god forbid, I become unemployed. But I guess that's what happens to some people sometimes, right? Financial ruin is always 1 step away. I suppose, if we really wanted to be comfortable, we could have stayed in that Cape. Probably paid it off in 10 years. And retirement would have been all that much closer. *shrug* oh well. At least I've got the space to store up my car projects for when I eventually get around to retiring in 30 years.

jipster

talking about old houses and how they are better built than new cookie cutter ones.

My first house was a nice cape cod with basement, I think it was built in early 50's. Even though it was not a brick exterior, it was rock solid and tight as a drum. Noise almost disappeared when I closed a window.

When the airport authority took the neighborhood under some bogus claim (later we, neighborhood association, sued and won a large judgement), we were allowed to take anything out of the house we wanted. I had moved out and it was a day or two before scheduled demolition. A friend asked if he could have something off interior a/c unit. I had turned in the keys, told him to go get it if he wants it. He tried to kick, then crowbar the door open... he could not get in. The doors and doorframe were unbleievable solid and strong. Now, my current 1974 tri-lvel... not nearly as solid and tight.

As a general rule I think the overall quality of material was better years ago than today. Seems many builders want to make the shortcuts when it comes to quality. Build that nice looking home for the least amount possible. Cheap carpet, low end furnace and a/c units, low end shingle... less attention to detail which make older homes unique and more attractive.

bumpy

these last 30 years are quite a glitch in the normal trend of real estate in the USA.

More people with more money to bid things up, thanks to easy credit and creative financing.

stever

my current 1974 tri-level...

We should do a house swap sometime - I bet your floor plan isn't much different from my tri-level.

Did I mention that I hate stairs and none of my first houses I had in my youth had them? Now that I'm way past AARP eligibility, I have to stumble up and down them all day. :P

bumpy

old houses and how they are better built than new cookie cutter ones.

The old houses that are still around now were better built. The old houses built like today's cookie cutters fell down or were torn down 50 years ago, so we don't think about them. I can drive around and point out all sorts of old houses that have been abandoned in place for whatever reason, passed over by potential buyers for new, modern construction. Some of them were well built, and some of them weren't.

qbrozen

Exactly.

Its just not a blanket statement that can be made. My parent's turn-of-the-century farmhouse has these crazy hand shaped 2x6s in the exterior walls and solid wood interior doors, BUT the plaster & lathe interior walls and single pane wood-framed windows leave ALOT to be desired.

There is something to be said for sheetrock, insulation, and vinyl argon-filled windows. If I could combine their houses skeleton with modern day insulating techniques ...

jipster

I grew up in a quad-level, so at the moment the tri-level is looking pretty good. I do remember my mom complaining quite frequently about "all the steps" in the quad. All the bedrooms and master bath were upstairs, the washing machine and dryer... all the way down in the basement.

We do plan on moving in the near future. Would like a nice ranch with a walk-out basement. Designate the basement as the kids zone.... enter at your own risk.

Mr_Shiftright

I'm only real point there was to point out that buying a house to flip in a few years is pure speculation, it's not investing in the traditional sense of the word. All you are doing is betting that someone will pay more than you did without you doing anything. Some stocks also buy and sell like this, and that is speculating as well. So is betting on number 12 in Vegas. But some stocks belong to companies that are actually building wealth, so that's more like sound investing. Stocks have almost a 100 year history of steady growth (if you held all your stocks at the time of the Great Stock Market Crash of 1929, you'd have been made whole in about 9 years). But real estate does not show a steady growth for 100 years....barely 25 or so.

okko1

plllllll :P

Mr_Shiftright

tell it to the poor people in foreclosure :P

PF_Flyer

I have a couple of opinions on those poor souls on the Alternate Route today :shades:

The phrase, "you reap what you sow" comes to mind

okko1

still watching the construction of the new one after the demolition of the old one. the builder chose the option of no basement. but did include safe room in the house. this will save much agravation in the future as this house is at the bottom of the hill.

sky23213

If you get more than one Tornado warning per season, concrete basement is a good thing to consider. Would you elaborate on the safe room though?

Karen_S

http://www.tumbleweedhouses.com/houses.htm

I particularly like the B-52 Bungalow. :shades:

stever

This one matches your smart car better.

I'm on the lookout for a great deal on some greenhouse fabric myself.

okko1

this is a room that in this area is built for storm protection. these are often included in homes as part of the basement foundation structure. and may very in size but will always have a few thing the same like 6in. thick concrete walls and will have a concrete lid or ceiling. the one in the little house currently under construction is 6ft. deep 4ft. wide. and 7ft. tall. the measurements are all from inside the box. it will be fitted with a steel door and anchored frame. these are often concealed by more attractive finishes. it will also have a fresh air supply and battery operated light. these rooms tend to vary in size this one is typical for a small patio home. if it is part of the foundation,that is to say in the basement often these will be part of a large stoop area of the front or rear porches. and maybe 20ft. long and 15ft. wide with up to a 10ft. ceiling.

sky23213

Thank You for the detailed explanation! It was pretty interesting. My initial impression was that your safe room is not part of the basement, that's why asked. We plan to do something similar when we finish our basement, but for now it serves the purpose, having concrete walls and being under grade. We will probably put a wall protecting the safe area from the walk-out door/window. Unfortunately, concrete ceiling is, from my understanding, a pretty difficult/expensive option at this point, so we should hope the I-beams hold if the worst happens.
And, of course, our next house will be brick, although that's pretty rare here. And quite expensive.

jipster

And quite expensive(brick)

I recall "build with brick" radio commercials several years ago saying it was only 5% more expensive to build with brick. Maybe, they were speaking of the actual building materials and not including labor?

PF_Flyer

Don't you just love advertising?? :confuse:

qbrozen

When house shopping, we saw a couple of houses with brick foundations. The condition those foundations were in convinced me that building with brick is NOT a good idea.

Although, I should point out these were old houses and maybe brick manufacturing has come a long way since then and the bricks last forever(?).

jipster

I'd say building with brick good idea.... building with brick foundation bad idea. :sick:

okko1

block maybe on 8in. footing . the walls are up on the little house. starting to look a little long and skinny but ya do the best ya can with what ya have to work with.

oldfarmer50

I'm in upstate NY near Albany and we haven't seen any of the wild swings of other parts of the country. We don't go up 50% a year but we don't have the crash either.

I bought my little farm in 1981 for $3000 an acre. Beautiful views of the Hudson valley with miles of forever wild land next to us. 8 minutes to downtown Albany and only 2 red lights between us and New York City.

We couldn't afford the $45K that custom built homes were going for so we built the house ourselves.

Our land is now worth about 60-100K an acre. Developers and our rich neighbor are fighting over who will pay us more.

I still remember worrying that we would never get our 3K an acre back if we had to sell.

tpulak

Man! half a million dollars for 1050 sq. ft?1! Whoa, that is so expensive!! In my place(Dallas , Texas) you can get a 3,200 2-story home for as low as $320,000. I know a friend of mine, he owns a 4,600 square foot home, that cost him only around $560,000 . And these are all new homes I am talking about. But and old home(around 1980's) that has 2,600 sqare feet(1-story) costs only about $100,00- $130,000 max. And I thought I was was one of the lonely buyers paying to much for their house!

fintail

I couldn't get a garden shed behind a crack house in my area for 130K. 320K might get a decent condo, but nothing too fancy.

Mr_Shiftright

The cheapest, shoddiest, smallest, most run-down pile of rotten boards in my town costs $650,000. It's absolutely ludicrous. There aren't even any listings for less than that aside from mobile homes and condos. A tennsy-weensy condo might cost you $325K.

kyfdx

Nowadays, a "brick" house just has brick siding... In most cases, it's just an outer layer, no different than having vinyl siding. It lends no structural support to the house. If done well, it may offer some extra protection from wind, etc., and it will certainly add resale value and aesthetic appeal, but it means very little structurally.

The 5% extra cost? That is 5% more for the whole house... If you are factoring in just the cost of siding the house... that portion of the job.. then the percentage difference is a whole lot more..

regards,
kyfdx

fintail

In many cases I see it only on the front of the house, too. Face brick is kind of uncool, although it looks better than vinyl or cheap composite clapboard. I bet it can be an issue in areas where the ground shifts or there are earthquakes. Houses sure are built cheap these days....cardboard 'n plywood.

fintail

A co-worker recently bought a 2400sq ft 1970s split in a decent area of a dreary suburb for 350K...but...on bad mornings it can easily be a 2+ hour commute each way. I know the market has cooled a little here, but it has a ways to go.