Fdcg27 is right. Houses should not be considered investments. You have to include the costs of all maintenance and upkeep. If the value goes up that is great but real estate values have turned into bubbles and they eventually revert to the mean.
Housing - Why are smaller houses not being built?
- Thread starter tony1679
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Originally Posted by hatt
Originally Posted by fdcg27
Builders and their real estate salesmen ("agents") underlings have carefully trained folks at large to believe that bigger is better, just as with the automakers who've brainwashed a majority of the new car buyers into thinking that they need a four door pickup truck or large CUV when a four door sedan would be more than adequate for their needs.
The coming recession will do a lot to make housing more affordable nationwide.
Just how low things go will depend upon just how overextended buyers are in the most overbid markets.
I know people who paid checkbook dollars for Florida places in the last recession and there were other markets that were even cheaper for real McMansions, like Vegas.
The real estate sales guys like to tout houses as investments, but they really aren't.
They're places in which to live.
How are you figuring houses aren't an investment? You have to live somewhere and rent tends to be more expensive than mortgage payments.
They are an investment similar to a car, except with slightly better odds.
In my area a 2bd home, basement garage and yard is $500 a month rent
Property taxes are nearly equal to the rent let alone mortgage.
Taxes and interest normally erode any potential gain
Originally Posted by fdcg27
Builders and their real estate salesmen ("agents") underlings have carefully trained folks at large to believe that bigger is better, just as with the automakers who've brainwashed a majority of the new car buyers into thinking that they need a four door pickup truck or large CUV when a four door sedan would be more than adequate for their needs.
The coming recession will do a lot to make housing more affordable nationwide.
Just how low things go will depend upon just how overextended buyers are in the most overbid markets.
I know people who paid checkbook dollars for Florida places in the last recession and there were other markets that were even cheaper for real McMansions, like Vegas.
The real estate sales guys like to tout houses as investments, but they really aren't.
They're places in which to live.
How are you figuring houses aren't an investment? You have to live somewhere and rent tends to be more expensive than mortgage payments.
They are an investment similar to a car, except with slightly better odds.
In my area a 2bd home, basement garage and yard is $500 a month rent
Property taxes are nearly equal to the rent let alone mortgage.
Taxes and interest normally erode any potential gain
Originally Posted by tony1679
I know this will probably stir the pot a bit, so let's try not to get this thread locked and keep things pleasant.
In my area (and probably everwhere else) there are endless cookie-cutter, crammed like sardines, abysmally built, entirely overpriced subdivisions being built anywhere they possibly can. It's crazy how quickly. And they all have price tags of $250k+ (I'm in Oklahoma, I understand this is nothing compared to other regions). These houses inevitably will be in shambles in 30-40 years due to the terrible build quality. As someone looking to buy their first house (most likely the one I'm currently renting due to lack of "good" options in the location I want), it's incredibly infuriating that I can't buy or even build what I want where I want it. Especially if you're as anti-HOA as I am (I don't want to turn this into an HOA discussion, that will always end poorly). So I have to ask. Considering the insane number of these high-end, high square footage homes being built, where are the quality, nice, small (1,000 square feet or less) homes? Why isn't anyone building these? The current trend of large expensive homes being built, any semblance of affordable modest housing being "flipped" and inflated out of reach, and rentals bordering armed robbery surely can't continue without consequence. Surely I'm not the only one who can see this..?
Why is living in a 2,000+ square foot house considered normal? Why can't people accept others wanting to live responsibly on their own land? Yes, tiny homes are gaining traction, but very little. It seems all new construction is either 1,800 square feet. Nothing in the middle.
My dream home is an excessively well-built, 2 bedroom, 1 or 2 bath, ~600-800 square foot, insanely energy efficient, simple house. No vaulted ceilings, no crown molding, no granite countertops, no luxuries. Yet no quality corners cut, and appealing to visitors/neighbors/local government. Built to last and save me money. The way a home should be. I've been in contact with builders and contractors, and several of my ideas would cost less than $75k to complete. I don't want a "tiny" (
Yes, I can do this in many areas around the state. Many areas would actually allow a primitive (think hundreds of years ago) cabin, as there's ZERO laws/building codes to enforce. But I want a certain location, and this location has strict codes. I understand codes are generally there for a reason, but it truly seems like the city has them solely to protect property values and drive prices up. With the housing market the way it is, countless people (especially millenials) can't/don't want to pay $200k+ for a home. We just don't want the debt hanging over our heads. So where are the nicely built, small, efficient, affordable homes in good neighborhoods? Especially if doing a community, not just a single home, this can be done for well under $100k per dwelling here including a small lot of land. So many people would buy these before they could lay the foundation. Why is this being ignored?
What's really irritating is there's a small community in my city that strictly houses homeless people. This community has very nice small houses that are given free of charge to shelter those in need. They're about 500 square feet, very well-built, efficient mini-houses. Why can the city allow 50 or so of these homes to be built for the homeless, yet I can't build the same exact thing on my own dime and land? It's infuriating. I'm grateful it provides for the needy, but I'm jealous that people are just given exactly what I want, yet I can't pay to have the same thing. I'm tempted to be "homeless" myself.
What are your thoughts? Am I just too far out of touch? Is my ideal home too crazy to understand? What I can't understand is owning a house with tons of wasted energy, space, and money. I just want to live within my means, responsibly and efficiently, in a desirable location, and I'm being prevented from doing so. Unless I can find a better option, I'm buying the current house I'm in for somewhere between $100-150k. It's too much money, too much space (1,800 square feet), and going to require too much maintenance to get it "acceptable" to my standards. Sound crazy? I agree. But I may not have much choice, considering similar houses are going for $200k, and what I want doesn't exist. I've even considered something like an accessory dwelling setup (ADU), but even that is shot down by building codes here. I literally can't win.
It's weird when someone says "take my money" and people don't care. Does anyone have a similar mentality? I'd love to hear you input. Sorry for the novel, but I've been needing to vent about this for a while.
Edit: I should clarify, when I say house, I mean free-standing single family house. No condos, apartments, townhouses, or I-can't-pee-out-my-window-without-hitting-my-neighbor's-house setups. A house like I'm currently in, with an acre of land, and my closest neighbor is about as far away as I can throw a rock (with a superb throwing arm).
My house was built in 2006, so maybe not a good comparo as I might be outside of your timeline, but it is 1600SF, and the construction quality is very good. All copper piping, built to universal code, etc. Inspector was impressed (I accompanied him through the whole process and he explained it all). I do have 18ft ceilings in the livingroom, and I don't have crown molding, but the house has excellent "bones" and seems well insulated (the heat-pump does fine in -10*F weather without using the heat-strips).
-Yes I have an HOA
-Yes I like my HOA
-Yes I live on 13 acres in the middle of nowhere
-Yes it was super hard to find a house on 5+ acres without a mobile home next to it that wasn't ALSO a 1.5 million dollar affair with 3500sf on a 150 acre ranch. LAND was the "no in between" thing for me. I kept finding shacks or mansions, no 14-2200sf houses on anything over 5 acres build after 2000, hardly.
-I also own a CUV, because it's necessary for my uses and I ended up liking SUV's, much to my surprise, after buying my first one back in 2014 (I came from sports cars).
I live in SW Missouri, for reference, OP.
I know this will probably stir the pot a bit, so let's try not to get this thread locked and keep things pleasant.
In my area (and probably everwhere else) there are endless cookie-cutter, crammed like sardines, abysmally built, entirely overpriced subdivisions being built anywhere they possibly can. It's crazy how quickly. And they all have price tags of $250k+ (I'm in Oklahoma, I understand this is nothing compared to other regions). These houses inevitably will be in shambles in 30-40 years due to the terrible build quality. As someone looking to buy their first house (most likely the one I'm currently renting due to lack of "good" options in the location I want), it's incredibly infuriating that I can't buy or even build what I want where I want it. Especially if you're as anti-HOA as I am (I don't want to turn this into an HOA discussion, that will always end poorly). So I have to ask. Considering the insane number of these high-end, high square footage homes being built, where are the quality, nice, small (1,000 square feet or less) homes? Why isn't anyone building these? The current trend of large expensive homes being built, any semblance of affordable modest housing being "flipped" and inflated out of reach, and rentals bordering armed robbery surely can't continue without consequence. Surely I'm not the only one who can see this..?
Why is living in a 2,000+ square foot house considered normal? Why can't people accept others wanting to live responsibly on their own land? Yes, tiny homes are gaining traction, but very little. It seems all new construction is either 1,800 square feet. Nothing in the middle.
My dream home is an excessively well-built, 2 bedroom, 1 or 2 bath, ~600-800 square foot, insanely energy efficient, simple house. No vaulted ceilings, no crown molding, no granite countertops, no luxuries. Yet no quality corners cut, and appealing to visitors/neighbors/local government. Built to last and save me money. The way a home should be. I've been in contact with builders and contractors, and several of my ideas would cost less than $75k to complete. I don't want a "tiny" (
Yes, I can do this in many areas around the state. Many areas would actually allow a primitive (think hundreds of years ago) cabin, as there's ZERO laws/building codes to enforce. But I want a certain location, and this location has strict codes. I understand codes are generally there for a reason, but it truly seems like the city has them solely to protect property values and drive prices up. With the housing market the way it is, countless people (especially millenials) can't/don't want to pay $200k+ for a home. We just don't want the debt hanging over our heads. So where are the nicely built, small, efficient, affordable homes in good neighborhoods? Especially if doing a community, not just a single home, this can be done for well under $100k per dwelling here including a small lot of land. So many people would buy these before they could lay the foundation. Why is this being ignored?
What's really irritating is there's a small community in my city that strictly houses homeless people. This community has very nice small houses that are given free of charge to shelter those in need. They're about 500 square feet, very well-built, efficient mini-houses. Why can the city allow 50 or so of these homes to be built for the homeless, yet I can't build the same exact thing on my own dime and land? It's infuriating. I'm grateful it provides for the needy, but I'm jealous that people are just given exactly what I want, yet I can't pay to have the same thing. I'm tempted to be "homeless" myself.
What are your thoughts? Am I just too far out of touch? Is my ideal home too crazy to understand? What I can't understand is owning a house with tons of wasted energy, space, and money. I just want to live within my means, responsibly and efficiently, in a desirable location, and I'm being prevented from doing so. Unless I can find a better option, I'm buying the current house I'm in for somewhere between $100-150k. It's too much money, too much space (1,800 square feet), and going to require too much maintenance to get it "acceptable" to my standards. Sound crazy? I agree. But I may not have much choice, considering similar houses are going for $200k, and what I want doesn't exist. I've even considered something like an accessory dwelling setup (ADU), but even that is shot down by building codes here. I literally can't win.
It's weird when someone says "take my money" and people don't care. Does anyone have a similar mentality? I'd love to hear you input. Sorry for the novel, but I've been needing to vent about this for a while.
Edit: I should clarify, when I say house, I mean free-standing single family house. No condos, apartments, townhouses, or I-can't-pee-out-my-window-without-hitting-my-neighbor's-house setups. A house like I'm currently in, with an acre of land, and my closest neighbor is about as far away as I can throw a rock (with a superb throwing arm).
My house was built in 2006, so maybe not a good comparo as I might be outside of your timeline, but it is 1600SF, and the construction quality is very good. All copper piping, built to universal code, etc. Inspector was impressed (I accompanied him through the whole process and he explained it all). I do have 18ft ceilings in the livingroom, and I don't have crown molding, but the house has excellent "bones" and seems well insulated (the heat-pump does fine in -10*F weather without using the heat-strips).
-Yes I have an HOA
-Yes I like my HOA
-Yes I live on 13 acres in the middle of nowhere
-Yes it was super hard to find a house on 5+ acres without a mobile home next to it that wasn't ALSO a 1.5 million dollar affair with 3500sf on a 150 acre ranch. LAND was the "no in between" thing for me. I kept finding shacks or mansions, no 14-2200sf houses on anything over 5 acres build after 2000, hardly.
-I also own a CUV, because it's necessary for my uses and I ended up liking SUV's, much to my surprise, after buying my first one back in 2014 (I came from sports cars).
I live in SW Missouri, for reference, OP.
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The terms "carefully trained" and "brainwashed" do not equate with anyone holding a gun to any buyer's head. Nothing shocking about people following a trend fueled by the producers. They seek merely to fit in and appear socially acceptable to those they view as their peers.
Rather, it's a matter of people having been convinced through extensive infotainment and phony investment advisors that bigger is better.
This has never been the case and many who can think for themselves own smaller homes and drive sedans.
Not so much a matter of what anyone can afford as it is a rational evaluation of one's needs.
Silly to wrap up too much money in a depreciating vehicle or possibly appreciating home when there are other places to put it with better returns, but people at large do make foolish decisions, which is probably good for the economy.
Google "the paradox of savings" to learn why this is so.
OTOH, economics also tell us that every market participant is a utility maximizer, so if a Mac Mansion and a four door pickup or a used Mercedes represent that to you, then that's what's right for you by definition.
Rather, it's a matter of people having been convinced through extensive infotainment and phony investment advisors that bigger is better.
This has never been the case and many who can think for themselves own smaller homes and drive sedans.
Not so much a matter of what anyone can afford as it is a rational evaluation of one's needs.
Silly to wrap up too much money in a depreciating vehicle or possibly appreciating home when there are other places to put it with better returns, but people at large do make foolish decisions, which is probably good for the economy.
Google "the paradox of savings" to learn why this is so.
OTOH, economics also tell us that every market participant is a utility maximizer, so if a Mac Mansion and a four door pickup or a used Mercedes represent that to you, then that's what's right for you by definition.
Originally Posted by fdcg27
The terms "carefully trained" and "brainwashed" do not equate with anyone holding a gun to any buyer's head. Nothing shocking about people following a trend fueled by the producers. They seek merely to fit in and appear socially acceptable to those they view as their peers.
Rather, it's a matter of people having been convinced through extensive infotainment and phony investment advisors that bigger is better.
This has never been the case and many who can think for themselves own smaller homes and drive sedans.
Not so much a matter of what anyone can afford as it is a rational evaluation of one's needs.
Silly to wrap up too much money in a depreciating vehicle or possibly appreciating home when there are other places to put it with better returns, but people at large do make foolish decisions, which is probably good for the economy.
Google "the paradox of savings" to learn why this is so.
OTOH, economics also tell us that every market participant is a utility maximizer, so if a Mac Mansion and a four door pickup or a used Mercedes represent that to you, then that's what's right for you by definition.
The problem with your thinking is that you're an absolutist. There are people out there who have Mcmansions and drive relatively new luxury cars. Only they tend to own business that spew out several hundred thousand in income every year and they've also accumulated a nice portfolio of properties. What do you think the end result of accumulating wealth is about? Save every nickle and live like a pauper? Your philosophy would basically say that everyone should live like a miser. You've really lost the whole point of accumulating wealth. I run credit checks on people all the time and you'd be surprised how many people out there fit in the category above.
The terms "carefully trained" and "brainwashed" do not equate with anyone holding a gun to any buyer's head. Nothing shocking about people following a trend fueled by the producers. They seek merely to fit in and appear socially acceptable to those they view as their peers.
Rather, it's a matter of people having been convinced through extensive infotainment and phony investment advisors that bigger is better.
This has never been the case and many who can think for themselves own smaller homes and drive sedans.
Not so much a matter of what anyone can afford as it is a rational evaluation of one's needs.
Silly to wrap up too much money in a depreciating vehicle or possibly appreciating home when there are other places to put it with better returns, but people at large do make foolish decisions, which is probably good for the economy.
Google "the paradox of savings" to learn why this is so.
OTOH, economics also tell us that every market participant is a utility maximizer, so if a Mac Mansion and a four door pickup or a used Mercedes represent that to you, then that's what's right for you by definition.
The problem with your thinking is that you're an absolutist. There are people out there who have Mcmansions and drive relatively new luxury cars. Only they tend to own business that spew out several hundred thousand in income every year and they've also accumulated a nice portfolio of properties. What do you think the end result of accumulating wealth is about? Save every nickle and live like a pauper? Your philosophy would basically say that everyone should live like a miser. You've really lost the whole point of accumulating wealth. I run credit checks on people all the time and you'd be surprised how many people out there fit in the category above.
I thought I made it clear that my thinking was that personal choice was paramount and that people make the choices that they think are right.
It isn't a matter of living like a pauper.
Rather it's one of living a comfortable life free from any worries about where the payments are going to come from next month. The phrase "nickel millionaires" comes to mind for many of these people who rely entirely upon next month's cashflow to survive. They are as close to disaster as is the average wage earner.
The end result of accumulating wealth is freedom from worry and the ability to do as one pleases as well as having something to leave one's children.
That is the point.
I certainly don't live like a miser and I have no desire to live larger than we do. I like to joke with my wife that we need to see our Authorized Mercedes-Benz dealer, but of course we don't. Been there, done that, enjoyed the experience and don't have the need to do it again.
At the end of the day, do you own your possessions or do they own you?
You may learn to understand this.
It isn't a matter of living like a pauper.
Rather it's one of living a comfortable life free from any worries about where the payments are going to come from next month. The phrase "nickel millionaires" comes to mind for many of these people who rely entirely upon next month's cashflow to survive. They are as close to disaster as is the average wage earner.
The end result of accumulating wealth is freedom from worry and the ability to do as one pleases as well as having something to leave one's children.
That is the point.
I certainly don't live like a miser and I have no desire to live larger than we do. I like to joke with my wife that we need to see our Authorized Mercedes-Benz dealer, but of course we don't. Been there, done that, enjoyed the experience and don't have the need to do it again.
At the end of the day, do you own your possessions or do they own you?
You may learn to understand this.
Lots of cash poor Americans just barely keeping their heads above water.
All it takes is a job loss, lay-off, leaky roof, major vehicle repair, etc... and they are broke.
You only live once so splurge until you are under a mountain of debt and then E-begging (Go Fund Me) so people can pay your bills.
All it takes is a job loss, lay-off, leaky roof, major vehicle repair, etc... and they are broke.
You only live once so splurge until you are under a mountain of debt and then E-begging (Go Fund Me) so people can pay your bills.
Originally Posted by fdcg27
I thought I made it clear that my thinking was that personal choice was paramount and that people make the choices that they think are right.
It isn't a matter of living like a pauper.
Rather it's one of living a comfortable life free from any worries about where the payments are going to come from next month. The phrase "nickel millionaires" comes to mind for many of these people who rely entirely upon next month's cashflow to survive. They are as close to disaster as is the average wage earner.
The end result of accumulating wealth is freedom from worry and the ability to do as one pleases as well as having something to leave one's children.
That is the point.
I certainly don't live like a miser and I have no desire to live larger than we do. I like to joke with my wife that we need to see our Authorized Mercedes-Benz dealer, but of course we don't. Been there, done that, enjoyed the experience and don't have the need to do it again.
At the end of the day, do you own your possessions or do they own you?
You may learn to understand this.
I don't think you really understand the point. The point is that everyone has there own separate situation so all this generalizing about how bad all this is probably doesn't really apply to some people. So the judgement/advice isn't applicable. It's basically sour grapes.
I thought I made it clear that my thinking was that personal choice was paramount and that people make the choices that they think are right.
It isn't a matter of living like a pauper.
Rather it's one of living a comfortable life free from any worries about where the payments are going to come from next month. The phrase "nickel millionaires" comes to mind for many of these people who rely entirely upon next month's cashflow to survive. They are as close to disaster as is the average wage earner.
The end result of accumulating wealth is freedom from worry and the ability to do as one pleases as well as having something to leave one's children.
That is the point.
I certainly don't live like a miser and I have no desire to live larger than we do. I like to joke with my wife that we need to see our Authorized Mercedes-Benz dealer, but of course we don't. Been there, done that, enjoyed the experience and don't have the need to do it again.
At the end of the day, do you own your possessions or do they own you?
You may learn to understand this.
I don't think you really understand the point. The point is that everyone has there own separate situation so all this generalizing about how bad all this is probably doesn't really apply to some people. So the judgement/advice isn't applicable. It's basically sour grapes.
Originally Posted by Rmay635703
In my area a 2bd home, basement garage and yard is $500 a month rent
Property taxes are nearly equal to the rent let alone mortgage.
Wow, where I am, $500 might get you a 300sqft studio apartment. Thanks Illinois.
In my area a 2bd home, basement garage and yard is $500 a month rent
Property taxes are nearly equal to the rent let alone mortgage.
Wow, where I am, $500 might get you a 300sqft studio apartment. Thanks Illinois.
Originally Posted by fdcg27
The terms "carefully trained" and "brainwashed" do not equate with anyone holding a gun to any buyer's head. Nothing shocking about people following a trend fueled by the producers. They seek merely to fit in and appear socially acceptable to those they view as their peers.
Rather, it's a matter of people having been convinced through extensive infotainment and phony investment advisors that bigger is better.
This has never been the case and many who can think for themselves own smaller homes and drive sedans.
Not so much a matter of what anyone can afford as it is a rational evaluation of one's needs.
Silly to wrap up too much money in a depreciating vehicle or possibly appreciating home when there are other places to put it with better returns, but people at large do make foolish decisions, which is probably good for the economy.
Google "the paradox of savings" to learn why this is so.
OTOH, economics also tell us that every market participant is a utility maximizer, so if a Mac Mansion and a four door pickup or a used Mercedes represent that to you, then that's what's right for you by definition.
Monetary (Federal Reserve) policy and tax policy (Mortgage Interest Rate deduction & State/Local property tax deduction) are more of a contributor to buying bigger than any "carefully trained" real estate professional. People by-in-large today don't buy homes in order to obtain social acceptance. That's 1980's thinking.
The terms "carefully trained" and "brainwashed" do not equate with anyone holding a gun to any buyer's head. Nothing shocking about people following a trend fueled by the producers. They seek merely to fit in and appear socially acceptable to those they view as their peers.
Rather, it's a matter of people having been convinced through extensive infotainment and phony investment advisors that bigger is better.
This has never been the case and many who can think for themselves own smaller homes and drive sedans.
Not so much a matter of what anyone can afford as it is a rational evaluation of one's needs.
Silly to wrap up too much money in a depreciating vehicle or possibly appreciating home when there are other places to put it with better returns, but people at large do make foolish decisions, which is probably good for the economy.
Google "the paradox of savings" to learn why this is so.
OTOH, economics also tell us that every market participant is a utility maximizer, so if a Mac Mansion and a four door pickup or a used Mercedes represent that to you, then that's what's right for you by definition.
Monetary (Federal Reserve) policy and tax policy (Mortgage Interest Rate deduction & State/Local property tax deduction) are more of a contributor to buying bigger than any "carefully trained" real estate professional. People by-in-large today don't buy homes in order to obtain social acceptance. That's 1980's thinking.
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Originally Posted by Pew
Originally Posted by Rmay635703
In my area a 2bd home, basement garage and yard is $500 a month rent
Property taxes are nearly equal to the rent let alone mortgage.
Wow, where I am, $500 might get you a 300sqft studio apartment. Thanks Illinois.
$500 a month in my neck of the woods will get you a bedspace and nothing more. Studios are going for $1200-1500 and higher depending on location.
Originally Posted by Rmay635703
In my area a 2bd home, basement garage and yard is $500 a month rent
Property taxes are nearly equal to the rent let alone mortgage.
Wow, where I am, $500 might get you a 300sqft studio apartment. Thanks Illinois.
$500 a month in my neck of the woods will get you a bedspace and nothing more. Studios are going for $1200-1500 and higher depending on location.
Originally Posted by BMWTurboDzl
Originally Posted by fdcg27
The terms "carefully trained" and "brainwashed" do not equate with anyone holding a gun to any buyer's head. Nothing shocking about people following a trend fueled by the producers. They seek merely to fit in and appear socially acceptable to those they view as their peers.
Rather, it's a matter of people having been convinced through extensive infotainment and phony investment advisors that bigger is better.
This has never been the case and many who can think for themselves own smaller homes and drive sedans.
Not so much a matter of what anyone can afford as it is a rational evaluation of one's needs.
Silly to wrap up too much money in a depreciating vehicle or possibly appreciating home when there are other places to put it with better returns, but people at large do make foolish decisions, which is probably good for the economy.
Google "the paradox of savings" to learn why this is so.
OTOH, economics also tell us that every market participant is a utility maximizer, so if a Mac Mansion and a four door pickup or a used Mercedes represent that to you, then that's what's right for you by definition.
Monetary (Federal Reserve) policy and tax policy (Mortgage Interest Rate deduction & State/Local property tax deduction) are more of a contributor to buying bigger than any "carefully trained" real estate professional. People by-in-large today don't buy homes in order to obtain social acceptance. That's 1980's thinking.
Interest rates high or low are capitalized into selling prices since interest rates have a powerful impact on the monthly nut for any house purchase.
When you throw in a fairly constrained supply of housing stock for sale along with plenty of folks with money in the market, you have a recipe for higher house prices.
The Fed is kind of stuck in that even with current and persistent bargain basement rates, they still can't meet their target of inflation in the 2% range. Since information flows are subject to lag, the Fed targets a modest rate of inflation since the alternative is the risk of asset deflation, which both sends exactly the wrong signal to producers of all goods and also subjects all debtors to paying back principle in dollars that are ever more dear.
WRT people's thinking and behavior, having been in my thirties in the eighties, I can assure you that nothing has changed in the way people make purchasing decisions. It's usually as much about impressing family, peers and co-workers as it is about what people really need and feel comfortable spending.
Then there's always that real estate sales guy encouraging people to stretch a bit in what they're willing to pay, just like a new car purchase.
Most who consider themselves savvy buyers in either arena really aren't.
Originally Posted by fdcg27
The terms "carefully trained" and "brainwashed" do not equate with anyone holding a gun to any buyer's head. Nothing shocking about people following a trend fueled by the producers. They seek merely to fit in and appear socially acceptable to those they view as their peers.
Rather, it's a matter of people having been convinced through extensive infotainment and phony investment advisors that bigger is better.
This has never been the case and many who can think for themselves own smaller homes and drive sedans.
Not so much a matter of what anyone can afford as it is a rational evaluation of one's needs.
Silly to wrap up too much money in a depreciating vehicle or possibly appreciating home when there are other places to put it with better returns, but people at large do make foolish decisions, which is probably good for the economy.
Google "the paradox of savings" to learn why this is so.
OTOH, economics also tell us that every market participant is a utility maximizer, so if a Mac Mansion and a four door pickup or a used Mercedes represent that to you, then that's what's right for you by definition.
Monetary (Federal Reserve) policy and tax policy (Mortgage Interest Rate deduction & State/Local property tax deduction) are more of a contributor to buying bigger than any "carefully trained" real estate professional. People by-in-large today don't buy homes in order to obtain social acceptance. That's 1980's thinking.
Interest rates high or low are capitalized into selling prices since interest rates have a powerful impact on the monthly nut for any house purchase.
When you throw in a fairly constrained supply of housing stock for sale along with plenty of folks with money in the market, you have a recipe for higher house prices.
The Fed is kind of stuck in that even with current and persistent bargain basement rates, they still can't meet their target of inflation in the 2% range. Since information flows are subject to lag, the Fed targets a modest rate of inflation since the alternative is the risk of asset deflation, which both sends exactly the wrong signal to producers of all goods and also subjects all debtors to paying back principle in dollars that are ever more dear.
WRT people's thinking and behavior, having been in my thirties in the eighties, I can assure you that nothing has changed in the way people make purchasing decisions. It's usually as much about impressing family, peers and co-workers as it is about what people really need and feel comfortable spending.
Then there's always that real estate sales guy encouraging people to stretch a bit in what they're willing to pay, just like a new car purchase.
Most who consider themselves savvy buyers in either arena really aren't.
Originally Posted by PimTac
Originally Posted by Pew
Originally Posted by Rmay635703
In my area a 2bd home, basement garage and yard is $500 a month rent
Property taxes are nearly equal to the rent let alone mortgage.
Wow, where I am, $500 might get you a 300sqft studio apartment. Thanks Illinois.
$500 a month in my neck of the woods will get you a bedspace and nothing more. Studios are going for $1200-1500 and higher depending on location.
Last year I took a look and it seemed like in NH it was around $1/sqft for renting. Higher if smaller, lower if really large, but around that. Nothing like when I was a teen in college splitting rent on a run down building, splitting rent by 4 or 5.
Originally Posted by Pew
Originally Posted by Rmay635703
In my area a 2bd home, basement garage and yard is $500 a month rent
Property taxes are nearly equal to the rent let alone mortgage.
Wow, where I am, $500 might get you a 300sqft studio apartment. Thanks Illinois.
$500 a month in my neck of the woods will get you a bedspace and nothing more. Studios are going for $1200-1500 and higher depending on location.
Last year I took a look and it seemed like in NH it was around $1/sqft for renting. Higher if smaller, lower if really large, but around that. Nothing like when I was a teen in college splitting rent on a run down building, splitting rent by 4 or 5.
Originally Posted by Cujet
Originally Posted by Mr Nice
All I need is a 3-2-2 ranch style, single story home.
That is in fact what I have. Except I have a 3 car garage. It's downright perfect. No stairs, no basement, no hassles.
What is a 3-2-2? 3 bed, 2 bath, 2 car I presume?
Just moved into our "new" house last week. 3 bed, 2 bath, 2 car garage, ranch but with an enormous basement (1936 up and 1888 down). [Can't wait to finish unloading the garage of the clutter! my legs gave out though so what is headed to the basement has to wait.] I wished for a larger garage but we needed to move, badly. And for some reason ranches aren't popular around here, and when we looked into building we ran into one issue: build what you want, don't accept compromise... which means one winds up over-spec'ing everything, then not liking the size of the bill. Better to accept someone else's decisions!
Arguably a larger space costs more to heat and whatnot, but sure does feel nice. Maybe in a couple decades my opinion will change.
What is crazy is the fact that we've yet to put in an air conditioner. Used to have 2 running all summer in our old 2 story house, but this ranch we keep the windows open for a breeze. One morning was sticky but once it warmed up outside, it wasn't that bad.
I consider my first home purchase a mistake. Tried to get into a starter home and try to ride the housing wave. Bought at the peak though. Which means I bought high and sold low. My loss, but at least I didn't pay that much more than rent. 2 bedrooms which was a mistake for a young couple: what happens when you have kids, and one of each? By all means, downsize into a 2 bedroom, but unless if you get snipped, just go big up front (if you're young).
Originally Posted by Mr Nice
All I need is a 3-2-2 ranch style, single story home.
That is in fact what I have. Except I have a 3 car garage. It's downright perfect. No stairs, no basement, no hassles.
What is a 3-2-2? 3 bed, 2 bath, 2 car I presume?
Just moved into our "new" house last week. 3 bed, 2 bath, 2 car garage, ranch but with an enormous basement (1936 up and 1888 down). [Can't wait to finish unloading the garage of the clutter! my legs gave out though so what is headed to the basement has to wait.] I wished for a larger garage but we needed to move, badly. And for some reason ranches aren't popular around here, and when we looked into building we ran into one issue: build what you want, don't accept compromise... which means one winds up over-spec'ing everything, then not liking the size of the bill. Better to accept someone else's decisions!
Arguably a larger space costs more to heat and whatnot, but sure does feel nice. Maybe in a couple decades my opinion will change.
What is crazy is the fact that we've yet to put in an air conditioner. Used to have 2 running all summer in our old 2 story house, but this ranch we keep the windows open for a breeze. One morning was sticky but once it warmed up outside, it wasn't that bad.
I consider my first home purchase a mistake. Tried to get into a starter home and try to ride the housing wave. Bought at the peak though. Which means I bought high and sold low. My loss, but at least I didn't pay that much more than rent. 2 bedrooms which was a mistake for a young couple: what happens when you have kids, and one of each? By all means, downsize into a 2 bedroom, but unless if you get snipped, just go big up front (if you're young).
Quote:
What is a 3-2-2? 3 bed, 2 bath, 2 car I presume?
Yes. But here in FL we don't have a basement. I was considering buying land and building a 3-2-2 with a $600K budget. Zero possibility I want a house with stairs.
What is a 3-2-2? 3 bed, 2 bath, 2 car I presume?
Yes. But here in FL we don't have a basement. I was considering buying land and building a 3-2-2 with a $600K budget. Zero possibility I want a house with stairs.
Thanks for the clarification.
I hear you on the stairs. I'm absolutely beat after moving--I hurt a leg going up and down stairs (old house was 2 stories, plus basement at new one). Have to wait this one out. But I'm still relatively young so the basement will be storage and hobbies for us; when we get old and don't want to deal, we'll steal the kids rooms (who should be long gone by then) and/or drop hobbies as need be. Single floor living was very high on our shopping list.
I hear you on the stairs. I'm absolutely beat after moving--I hurt a leg going up and down stairs (old house was 2 stories, plus basement at new one). Have to wait this one out. But I'm still relatively young so the basement will be storage and hobbies for us; when we get old and don't want to deal, we'll steal the kids rooms (who should be long gone by then) and/or drop hobbies as need be. Single floor living was very high on our shopping list.
Originally Posted by supton
Thanks for the clarification.
I hear you on the stairs. I'm absolutely beat after moving--I hurt a leg going up and down stairs (old house was 2 stories, plus basement at new one). Have to wait this one out. But I'm still relatively young so the basement will be storage and hobbies for us; when we get old and don't want to deal, we'll steal the kids rooms (who should be long gone by then) and/or drop hobbies as need be. Single floor living was very high on our shopping list.
I bought a house from an 89 year old man that he started building when he was 75. It is a 2 story, master up stairs, need to go up about 5 vertical feet of stairs to get to the front door.
Use it or lose it.
Thanks for the clarification.
I hear you on the stairs. I'm absolutely beat after moving--I hurt a leg going up and down stairs (old house was 2 stories, plus basement at new one). Have to wait this one out. But I'm still relatively young so the basement will be storage and hobbies for us; when we get old and don't want to deal, we'll steal the kids rooms (who should be long gone by then) and/or drop hobbies as need be. Single floor living was very high on our shopping list.
I bought a house from an 89 year old man that he started building when he was 75. It is a 2 story, master up stairs, need to go up about 5 vertical feet of stairs to get to the front door.
Use it or lose it.
No thanks. My son has muscular dystrophy and I'd just as soon not have to install an elevator. Plus one never knows what the future holds for us. Yeah I get it, use it or lose it, but I can get that enough at work (three stories, so I try to walk all three flights once per hour for exercise) or elsewhere.
Originally Posted by Ws6
Originally Posted by supton
Thanks for the clarification.
I hear you on the stairs. I'm absolutely beat after moving--I hurt a leg going up and down stairs (old house was 2 stories, plus basement at new one). Have to wait this one out. But I'm still relatively young so the basement will be storage and hobbies for us; when we get old and don't want to deal, we'll steal the kids rooms (who should be long gone by then) and/or drop hobbies as need be. Single floor living was very high on our shopping list.
I bought a house from an 89 year old man that he started building when he was 75. It is a 2 story, master up stairs, need to go up about 5 vertical feet of stairs to get to the front door.
Use it or lose it.
No one knows what their future will bring.
To add: I was healthy and active for my first 56 years. Then suddenly I wasn't. Everything came out of the blue.
Originally Posted by supton
Thanks for the clarification.
I hear you on the stairs. I'm absolutely beat after moving--I hurt a leg going up and down stairs (old house was 2 stories, plus basement at new one). Have to wait this one out. But I'm still relatively young so the basement will be storage and hobbies for us; when we get old and don't want to deal, we'll steal the kids rooms (who should be long gone by then) and/or drop hobbies as need be. Single floor living was very high on our shopping list.
I bought a house from an 89 year old man that he started building when he was 75. It is a 2 story, master up stairs, need to go up about 5 vertical feet of stairs to get to the front door.
Use it or lose it.
No one knows what their future will bring.
To add: I was healthy and active for my first 56 years. Then suddenly I wasn't. Everything came out of the blue.
Last edited:
Originally Posted by PimTac
Originally Posted by Ws6
Originally Posted by supton
Thanks for the clarification.
I hear you on the stairs. I'm absolutely beat after moving--I hurt a leg going up and down stairs (old house was 2 stories, plus basement at new one). Have to wait this one out. But I'm still relatively young so the basement will be storage and hobbies for us; when we get old and don't want to deal, we'll steal the kids rooms (who should be long gone by then) and/or drop hobbies as need be. Single floor living was very high on our shopping list.
I bought a house from an 89 year old man that he started building when he was 75. It is a 2 story, master up stairs, need to go up about 5 vertical feet of stairs to get to the front door.
Use it or lose it.
No one knows what their future will bring.
To add: I was healthy and active for my first 56 years. Then suddenly I wasn't. Everything came out of the blue.
This is true. I could also die tomorrow, but I'm not going to rush out and max my CCs today. Still, if I cant make it up stairs, I'd need to move anyways, so it was a moot point for me. Typical home owners, I understand though are more along the lines of your thoughts.
Originally Posted by Ws6
Originally Posted by supton
Thanks for the clarification.
I hear you on the stairs. I'm absolutely beat after moving--I hurt a leg going up and down stairs (old house was 2 stories, plus basement at new one). Have to wait this one out. But I'm still relatively young so the basement will be storage and hobbies for us; when we get old and don't want to deal, we'll steal the kids rooms (who should be long gone by then) and/or drop hobbies as need be. Single floor living was very high on our shopping list.
I bought a house from an 89 year old man that he started building when he was 75. It is a 2 story, master up stairs, need to go up about 5 vertical feet of stairs to get to the front door.
Use it or lose it.
No one knows what their future will bring.
To add: I was healthy and active for my first 56 years. Then suddenly I wasn't. Everything came out of the blue.
This is true. I could also die tomorrow, but I'm not going to rush out and max my CCs today. Still, if I cant make it up stairs, I'd need to move anyways, so it was a moot point for me. Typical home owners, I understand though are more along the lines of your thoughts.
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