Posted on 02/07/2024 8:53:49 PM PST by NoLibZone
They add 10’s of thousands of dollars to the cost.
In one local jurisdiction, gravity is no longer good enough for septic systems. Despite the fact that it has worked reliably since the beginning of septic systems, the new ones rely on expensive electronic controls, pumps and alarms. Since they are less reliable with all of the added complexity, they must also be regularly inspected (for a fee) This has exponentially raised the installation cost. A septic system that once cost three thousand dollars now costs well over $25k, plus inspection fees that were once non-existent and electricity costs. That is just one of many things that needlessly add to the cost of a new home in that area. Fortunately, gravity still functions in many other less enlightened places.
OTOH, now we have a very entrenched Deep State intent on eliminating the middle class so they can live luxuriously in their ivory tower homes, with the best of everything, while the "unwashed masses" (us) live in hovels they will build for us, called "the Projects".
Spend less money than you make. Save more money than you spend. If you need to spend, spend time not money.
My progression:
Couch in friend’s house
Shared dumpy apartment
336 sq ft trailer (paid cash)
500 sq ft trailer (cash again)
800 sq ft 1895 house (fixer upper with mortgage paid off)
1600 sq ft 40 yr old house w/garage (paid off mortgage)
45 years later: 2500 sq ft pool house w/3 car (paid cash, no mortgage)
Live within your means.
Single family housing became scarce when families moved out of the cities into the suburbs because they no longer needed to go into the office every day. Why live in NYC or San Francisco when you can commute from your living room?
In addition, the Air BnB and rental companies started gobbling up these homes when the interest rates were low. When your mortgage is 2.9% you can afford to buy and rent it out. That sucked up a lot of smaller homes in the nicer suburbs.
Most home markets had/have a pretty predictable flow. In my town you get people moving in May and August, in order to prep for the next school year. There is a smaller supply throughout the year as people die, retire, or just downsize/move.
If you bring in just a small percentage of “work from home” or non-occupant folks, it throws the whole thing off. The supply contracts significantly.
The second factor was low interest rates. Having the cost of money being low, AND you toss in a shortage and that will make it a super sellers market.
Market factors will have to change in order for the single family home to become “affordable.” Either there will have to be more supply—not possible in a lot of places due to the zoning restrictions/land availability/construction costs. Or, there needs to be an incentive and path for people to downsize.
I own a large 4 bedroom home. It’s just my wife and me in the house (I guess we could invite immigrants..). I would love to move, but the question is “to where?” The cost to move and the price of a smaller home is not practical if we want to stay near our kids and grandkids.
Finally, salaries and interest rates need to normalize. 6% interest on a mortgage is not outrageous—it’s normal. But, after 15 years of almost zero percent cost of money for the banks, 6% is extreme. Salaries are moving up—but at a much slower pace. And the folks in the existing homes are NOT going to walk out of their places at a loss.
The counter to this is the coming disaster that is commercial real estate. There are literally millions of unoccupied square feet of retail and warehouse space in my county. I cannot imagine it is better in other parts of the country.
Banks need to make up for those losses through their mortgage and loan businesses.
There is a reset coming and it will surprise a lot of people.
Automation has been a much bigger factor than foreign competition in many of those job losses.
Actually, what I witnessed in the 1990s Asian Immigration (Boat People, etc) coming into my city was the opposite. We had entire generational families move into rental units in my neighborhood. They ALL worked. The entire family would toss their money into a pool and they would by a three family house within a year.
The next year they would buy another. And then another.
Within ten years they were owners of 10-15 units—and most of them were mortgage free.
They were not the easiest people to live next door to...and I moved out to the suburbs. But, they are moving into my suburbs now. Their grandkids are the valedictorians at the high school. And they drive better cars than most of us. Now...they are good neighbors who don’t tolerate much crap on their streets.
The American dream is out there. But a lot of “kids” think they “deserve” it without working as a family unit and simply working at their entry level job. The Dream hasn’t changed at all. But the way to get it has been muddied.
Interesting thought on zoning. (Shameless plug alert) my son works for Texas Public Policy Foundation, a conservative think tank, and just published a couple of articles on that very topic. Che was comparing Houston ( no zoning) and Dallas that has very strict zoning ordinances on minimum lot size and how that impacts median house cost.
I’ve thought that too. When I did some research I learned why that doesn’t happen. The cost to construct a 2 bedroom home vs a 4 bedroom is only marginally less. This takes into consideration the building lot, materials, zoning and permit costs, and connections to utilities.
A three or four bedroom home will sell for significantly more than a 2 bedroom. To maximize your profit, you build at least 3 bedrooms—even when people don’t need them.
It makes sense from the construction perspective. It doesn’t help from position of being a new homeowner.
The other thing going on is that the country is on the cusp of a massive movement in real estate. Let’s face it, we Boomers are not going to live forever and we hold a bunch of decent real estate. Where is THAT going in 10-15 years?
Is a bank going to lend you money to build thirty homes on that huge piece of old farmland when there isn’t going to be a market for it in 10 years?
That doesn’t work anymore. The system is rigged towards the elites.
My parents bought their home in 1956 for $11,000. The mortgage was something like $150 a month. Which is pocket money today. But there were months when I was the very youngest of four children when the phone was ringing midway through the month looking for the check.
I think everyone “struggles” at first.
When I was going through my parent’s “papers” I was stunned at their annual salaries. My mom was a teacher and my Dad was a pretty high level manager at the Post Office. I think he topped out in the $40k range and my mom never made more than $22k. I was making their combined salaries when I was 25—almost 40 years ago.
My wife and I had some tight months with our first home...so its ALL relative.
End the Fed
These young people who are starting out with tiny homes actually are doing just that, except being kinda extreme about it.
A young individual or couple would do well to minimize and start with the smallest home they could pay off in five years, and go from there. If they live and work in a big city where that's not plausible, that is their choice.
DON'T let the REALTORS, MORTGAGE LOAN BROKERS, or RELATIVES goad you into the conformity of a big house you can't afford. ("But LOOK at the money you'll save on your TAXES!!" - This is a lie.)
To make any of that happen, communities have to elect many fewer collectivists at lower levels of government. I don't think enough GenZ'ers realize that the woke leaders they admire are the very people who don't want them to own homes - or anything else. They are stuck on the story that the Boomers "stole it all" - a convenient excuse that the Left hypes endlessly.
Repent, believe the gospel, and follow Christ: because national judgment doesn’t age well with time. It gets progressively worse.
Or embrace the suck. Those are your options.
All excellent ideas that should be implemented as of yesterday.
But prices will not decline unless and until hydrocarbon fuel costs decline. This impacts our trucking system more than anything else. An example: a lot of the timber for new homes comes from leftist states that are forcing truckers to eventually use very expensive and low-ability EV vehicles to move goods to the rest of the USA. Since states rights prevent the FedGov from mitigating such rules by federal fiat, I am not sure how sane laws can be installed in place of the current crapola in CA, OR, and WA.
This is a very interesting idea.
Nuclear war.
Not my idea, but it would fix it.
It’s the only way to be sure.
A fair market. A little muscle on the monopolies.
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