It's not so much living near co-workers. I'm struggling to find anything decently sized at even the 600PCM mark. Yeah, wanting to live in 'cool' places like where the jobs are... Not only that, but it seems people seem to agree that 28% of a families gross income is the appropriate amount to spend on a mortgage. A custom house is a one-off. Add lodging costs for the peeps that come to install because this house is in BFE. So even though homes are more expensive, they are also more attainable because of higher wages. Thank you in advance! But I'd imagine you're really paying for the view on that house. Welcome to r/Futurology, a subreddit devoted to the field of Future(s) Studies and speculation about the development of humanity, technology, and civilization. So in my opinion it's just that people will always be competing at the same level relatively so we will always spend the same % of income on housing. I don't understand why so many people think they need a minimum of 2,500 sq ft. Great to see the tiny house movement taking off. When demand for housing increases (as it has been in cities for at least the last 20 years), and supply is restricted (as it is in every American city), the price goes up. We just don't have a lot in common. Thank you for getting what I'm saying. Housing prices are hugely driven by housing as a financial commodity for investing, and near zero interest rates and quantitative easing since the 2008 financial crisis. OP is asking why the house costs so much, based on his analysis of its apparent component costs (land, materials). houses I don't get along well over long periods of time with people in the country. Just wondering if it's worth the money. The baugruppe approach is catching on in some more costly, more liberal US cities, where it's called cohousing. It's not a mansion by any means, doesn't have a theater or a huge kitchen or anything like that. As much as people here like to push tiny/communal/green housing, the current housing industry has little interest in making less money by selling wealthy people tiny houses when the could build small suburban cities made of huge new houses. There are a decent number of windows, but the home itself is pretty basic. We're not from DC originally and are used to getting more house for the money. Some of the replies here are helpful, but most are so rude for no reason. Marketing toward financially independent types. Land Shortages . I feel like a jerk whenever I say this to people that already own houses. Add lodging costs for the peeps that come to install because this house is in BFE. I don't understand why so many people think they need a minimum of 2,500 sq ft. Great to see the tiny house movement taking off. They don't get it. edit: maybe what's needed is start building a city from scratch , with part of the city code are some measures to stop making housing a financial commodity , and instead focus on building affordable communities. I am really curious what kind of house you live in right now to call this basic? montrously tall houses packed together on small bits of land with 3 car garages. Not even "tiny", but something that isn't a McMansion. Similar math applies to single-family homes: according to data from the National Association of Home Builders, the median cost of constructing a single-family home in 2015 was $289,415, or $103 per square foot. It’s a reasonable question given that so much of the economy moves in lockstep, and the last economic crisis in 2008 sent the housing market into free fall. Brick is more expensive: Bricks tend to be more expensive than other exterior products, such as vinyl siding. High demand and low supply for property describe a seller’s market in real estate. In fact, 64% of renters believe home prices in their area have increased over the past 12 months. There's better places you could have asked about this in the short run. Honestly, 1.1 mil for that seems like a very reasonable price. In the 1960's, we and everyone we knew had a 3 bedroom, 1 bathroom house that ran about 1,200 sq. loans Why are houses/flats in the UK so bloody small? Looking at this house, admittedly without knowing anything else about it other than the photos and what you've said, I'm kind of amazed the price is that low. Although old build houses are cheaper to buy, the owners often end up paying more for renovations. I guess I should've worded it differently. As a general rule, new build houses are usually more expensive than older properties in the UK. 2 1 And they’re not wrong. Typically 3 bedrooms two baths. It really has to do with location. Thank you. Several reasons. In 1971, tuition at Harvard University cost students $2,600 annually. Press J to jump to the feed. “And you wonder why homes have become unaffordable?” he asks. investing The mortgage and maintenance on the co-op we bought that we converted to a 2 BR costs about $1900 a month. Location, location, location. I think that part of it is that most people's expectations are a LOT higher today than they were when I was a kid. Thinking about buying a home, but frustrated by rising prices in your community? The problem is political, not technological. I googled why are house plants so expensive and found this piece which was wonderfully written with wit and great advice. Likewise, demand has been steadily increasing. Last year homes weren’t that bad and that was during covid but now, this shit is ridiculous. Why are houses so expensive in 2021??? Generally speaking, if it's easier to finance large amounts of money then it behooves the college to charge more. A similar rental would cost $1800 to $2000 a month so there isn’t much of a savings with renting. lending Germany has a brilliant thing (that builds in 1 in 10 of their housing stock) called Baugruppe - where groups of people form co-operatives to finance (often from Credit Unions) & build small developments, much cheaper than from traditional developers. Why the tiny house movement doesn't take off: Because the cost of land, permits and hooking up your home to permanent gas, electricity, water and sewage is a huge factor in the total cost of building a home. There is 3779 square feet x $295 per square feet = $1,114,805 total cost. We lived in what was considered a nice, middle-class neighborhood. Why are California housing costs so high? Some possible additions: Wilko, Ikea, & B&Q although not bought plants in over 2 years. Looking at their costs and searching for answers as to why it costs what it does is pointless. I just want something modestly sized and somewhat nice on the inside. house It's like asking why a beater in the inner bay area is still $600k. Every light fixture, every plumbing fixture, is a one-off; no builder grade items - unless you want that, in which case why go through building a custom house. Starter homes are now +30 miles further out, or even further in the very large cities like San Fran where many smaller cities touched and created a mega city. They don't often frame it that way, but when you hear "that will cause too much traffic" or "there isn't enough parking for more housing" or "that wouldn't fit with the historic nature of our neighborhood", that's what you should be thinking. Literally everything about this house? apartment If a home doesn't sell in a market that is moving, there might be something wrong with it—or it might just be overpriced.Buyers often bypass opportunities to make offers on overpriced homes, but if you do this, you might be passing up an opportunity to buy your dream home for a bargain price. People will buy as much as they 'can'. Go to a lighting store, go to a plumbing showroom, price that shit out, and then come back and wonder why this house is so expensive. this home is anything but "basic" as it clearly has high end finishes and design elements, Right? I think it's more about location than scarcity. So the problem is that people can't afford a place to live where there are jobs that would pay for said housing. And then you gotta pay $10,000 per m2 for city areas, the house price doesn't really matter there. The location, custom cabinetry, custom closets, high-end materials, built in commercial appliances, large lot, pool in the desert, labor costs out in a scenic vacation spot. Ahhhh, Utah. So what makes it so expensive? Kathleen Pender May 5, 2018 Updated: May 5, 2018 5:13 p.m. Facebook Twitter Email LinkedIn Reddit Pinterest landlords borrowing The same one-acre portion of land in the middle of a city can be used to build one single-family house or 40 townhomes or a 250-unit highrise. The problem is something called "rent-seeking behavior". One way they try to do this is by restricting what other property-owners can do with their land, by lobbying the city government for new laws. But still, that does nothing to solve the core of the problem, that you mentioned: housing as a financial commodity, which causes the land to become a financial commodity, and here purchase groups don't help. Simple economics. Now starter homes 60-70 miles out. You’re not alone. And this area seems nice, but the houses seem so over-priced. This is not a basic home at all. People want to live in cool places. For example, a one-bedroom older house in London costs on average £137,000 less than a one-bedroom new build flat. Also, at this particular moment in the US, we're in another housing bubble that is due for a slide. If you want to move outside the big cities (or even in big cities that have fallen out of favor like Detroit), you can get nice houses for like $50k or less. Who the hell has a 4K sqft home? It doesn’t matter if a contractor could get all those materials and build it for $200k, that is irrelevant. mortgages Also there's not a bunch of construction workers who live around there, they have to be brought in from other cities and housed there. Take a look at New housing development areas and you'll see towering 3500+sq.ft. Buying a house is harder for millennials than it was for their parents' generation, but that doesn't mean all hope is lost. It’s a dense state, the densest state in the country. Most out of touch post ive seen all wknd. Most real estate markets in the US are currently considered seller’s markets, although the trend may be moving towards a buyer’s … But most city governments restrict developers from deploying this technology through zoning laws. No one had a garage - we had carports. I've often wondered why this approach hasn't caught on in other countries - if you tied it to 3D printing of houses - you have the potential for dramatically cheaper housing, especially in less popular locations, where high land prices aren't an issue. 90k gets me a property that sometimes only needs cosmetic work. Houses were way too expensive so we looked at co-ops (not sure if they have these in Toronto). I grew up in a family of four in a 100 square meter house, and it was considered big. 2k is plenty for your average family of 4. If they have kids they also want to live in good school districts. Yeah. Add a custom pool. We invented the necessary technology to make housing relative cheap even for in-demand areas of cities about 165 years ago: the safety elevator. Most replies here are missing the root cause of OP’s confusion. They are older and say that they know the best zip codes for our commute and desire for schools. Data from Homes & Property No one had a garage - we had carports. Those homes are now sold to people with higher income levels. These are usually small developments in which everyone has their own small home, but with shared grounds and often a central dining/social hall. Penguin Classics. Preferably with pipes that aren't made of lead. Population Density. I don't see why there's a huge hype about tiny houses. Add to that people will probably always use house size as a show of wealth. in cities the majority of the cost is in the land value, which is limited. But as far as i know , the savings are something around 10%-20% too(or maybe a bit less) - the profit by the entrepreneur. New comments cannot be posted and votes cannot be cast. The higher the demand for property, the higher the prices will be. Thanks! There aren't pre-measured, pre-cut anything, no economies of scale. 4 People with Very Different Incomes on Living in the World's Most Expensive Ski Town We asked four residents earning between $30,000 and $200,000 how they make it work. 100k and up usually gets a property that doesn't need any work done at all. How is this house so cheap? I lived in one of the most expensive areas in California, Santa Clara County, for 32 years, but for the past 8 years I have lived in one of least expensive areas, Lake County. ALL OF THIS. But this is only a problem because most cities have strict regulations on how densely housing can be built. & actually has a yard, usually has a garage as well. This is why houses are built in the first place—someone realized they could build it for less than it will sell for, and they want that profit. financing This would be easily $5 million in my area. Her dad currently lives in a mcmansion as described above with no kids and 3 cars in a neighborhood of other giant-for-giants-sake houses. Trucks are so very nice, and so expensive, that you get anxious using them as trucks. (If this isn't the right subreddit to post this to, please feel free to direct me to the correct one.) Especially if the house was built earlier than 1900 (which is rather common). The median price for a house now tops $600,000, more than twice the national level. Wait, what? I have a city mentality. Materials are crazy expensive for anything that's not home depot garbage. ! loan Even if the land costs nothing, and the developer makes no profit, this is already out of reach of many would-be buyers. I have an unusual qualification to respond to this question. Outside cities, the cost of the house is mostly the infrastructure, but in cities the majority of the cost is in the land value, which is limited. Pretty much ideal but also three times my actual salary. If you can’t find a house you want to buy you may be tempted to build your home yourself. A lovely read. Sean Linkletter from JLL China explains why all major Chinese cities are substantially higher than the United States P/I average of 2-4, including home prices in Shenzhen, which were a whopping 46 times average income by end-3Q17. Since he had fewer homes to sell, his asking price per dwelling soared 233 percent — from roughly $300,000 to $700,000. Stick-built means your home is built the old-fashioned way, with a crew of workers on site for months raising the home and fitting it with plumbing and electricity. It's in kayenta, a super ritzy, artsy community for rich people and frankly, it's a pretty sick house. At its most basic level, it’s a story of supply and demand-- lots of people want to live here, and there aren’t enough homes to go around.. If people are fleeing the Bay Area for cheaper housing, why is it still so costly? Press question mark to learn the rest of the keyboard shortcuts, near zero interest rates and quantitative easing. We have some cheap houses + property out in the woods/mountains in my country. Think about it. ... help Reddit App Reddit coins Reddit premium Reddit gifts. But there are lots of uniquely California factors-- from the shape of our coastline to Proposition 13 -- that have attached a painfully expensive price tag to the California dream. Then they wonder why the economy sucks so badly without realizing that a big part of the reason is that a majority or people are paying for things with money that they don't even have. Basic? it looks sick, set in a canyon, has a pool, super modern and stylish. NJ packs in 1,218 people per square mile. My girlfriends grandma raised 4 kids in a 750sqft house and they were considered middle class at the time. Here is the home I'm referring to: https://www.j2-construction.com/project/modern-by-nature/. There is something similar to the Baugruppe in israel, called "purchase group". I live in a medium cost of living area and that home would easily be 1.5 mil or more. Let’s break it down. By HelloRF Zcool. Houses are unequivocally more expensive today, in real terms, than they used to be. The low interest rates have a double effect, they make other investments less attractive and money easier to obtain to finance housing purchase for investors. That's a large, totally custom house with gorgeous views. The reason we see McMansions is because the cost of building a 1,000 Sq. King has been very blunt about why it took him so long to dip into the haunted house genre: because he was convinced the best haunted house novel had already been written. I am willing to pay more to live in a neighborhood that agrees with my sentiments. The "rich" people on the block had 2 bathrooms and a pool, but it was basically the same house otherwise. They are highly sought after homes, not starter homes. Considering all that the price is pretty reasonable, IMO. A basic modern style home would likely be something that is around ~1700 sqft, with IKEA kitchen and low end stainless steel appliances and good looking vinyl floors to imitate hard wood planks. What silver spoon fed location do you live in? only reason it isn't 2M is its in the middle of nowhere, Utah. According to the Brick Industry Association, a 2,500-square-foot brick home typically costs 6 to 7 percent more than vinyl. The materials clearly are high end, we are talking about huge glass windows, a decent looking pool, likely a high end hvac system. There is definitely a shortage of affordable "starter" homes. It's a positive feedback that just keeps inflating the cost. I'm not sure what world you're from where you think that's a basic home. It seems like the majority of these places may have one decently sized room, but the bedrooms always end up being like shoe-boxes. Press question mark to learn the rest of the keyboard shortcuts. For a hot minute now the average new car price has been about $34,000, a historic high in … In that case, you’ll need to choose between a stick-built house and a prefab home. https://www.j2-construction.com/project/modern-by-nature/. Here’s a closer look at the factors that make building a house so expensive. Now even those may cost up to ~800k depending on location (Seattle). If people can live further out with less of an impact on their lifestyle, then most likely housing in expensive areas will become cheaper. Why we don't see any technological improvement that makes housing no-scarce? By using our Services or clicking I agree, you agree to our use of cookies. If this home is basic I’d hate to see what mine is considered.. lol. This is also one thing that automated driving cars could solve. When you buy an existing home, the cost of … Also, there are parts of the country were 1.1 mil buys you a 2 bedroom 1950's 900 sq ft bungalow. ft. home versus a 2,000 Sq. The key point here is that a house’s value is NOT determined by the sum if it’s parts. It’s a big fancy house in a fancy location sooo... Yeah but a fancy location in BFE with no jobs or industry. Yes, that's right, $1.1 MILLION DOLLARS. The house sells for the going market rate in that area, period. ft. We lived in what was considered a nice, middle-class neighborhood. Why? Cookies help us deliver our Services. Same thing happened to college tuition. foreclosures The "rich" people on the block had 2 bathrooms and a pool, but it was basically the same house otherwise. My husband and I just finished having a house built. This house is a bargain. Why Vancouver’s real estate prices are so crazy By Romana King on April 22, 2016 From foreign buyers, to unscrupulous agents, here are the factors that help push prices up wtf? The one reason why D.C. is so slow to adapt, and why housing costs are now so high, predates the Great Recession by almost a century: the Height of Buildings Act of 1910. Umm I don't know what parts of the US you are speaking of, but 50k will get me something that needs an incredible amount of work done, whether it's in the ghetto or out of it. Ft. home isn't that much different because of the other required costs, but a builder can show a higher perceived value to customers and charge alot more (aka make more profit). The fucked up thing about housing, is that it's based off of a money borrowing system. Buy it. Why Are Houses So Expensive? New comments cannot be posted and votes cannot be cast, real estate buying a house There are overpriced gems hiding among the inventory of homes for … It has a lot of bells and whistles and, of course, the location/community is expensive to begin with. A great part of a person's income is going to renting/buying a house. There is no house scarcity in the US. No surprise, these seem very popular with younger European immigrants. The market isn’t promising at all! In Canada, Vancouver has Toronto beat as the most expensive city to rent in but not by much. Many millions of homeowners would like to see the value of their houses increase over time, even though a house is really nothing more than a depreciating manufactured product like a car. Why isn’t the tanking economy bringing home prices down with it? foreclosure, Press J to jump to the feed. There is that, but construction is still labor intensive and a good chunk of that requires skilled labor which is more expensive. What am I missing? In fact, the median national home price has been rising all year—coming in at 11% more expensive in August 2020 compared to the same time last year. landlord Go to a lighting store, go to a plumbing showroom, price that shit out, and then come back and wonder why this house is so expensive. Existing residents have a strong financial incentive to increase the value of their house by restricting development of additional housing. The low interest rates have a double effect, they make other investments less attractive and money easier to obtain to finance housing purchase for investors. There doesn't seem to be any happy medium in the market. Why are Chinese homes so expensive? Now my SO and I share a 40 square meter apartment (which is smaller than average, but still good). I enjoyed reading this. 1st Gear: Pickup Buyers Are Fed Up With ‘Overpriced’ $50,000 Trucks. foreclosure So what’s different this time around? Add a custom pool. That’s big even by McMansion standards. Education is more expensive, too. Quite contrarily, lower demand and higher supply for properties describes a buyer’s market. It comes down to simply supply and demand: the supply of homes is relatively inelastic, since it takes years to build new neighborhoods (mostly due to legal impediments). Are more expensive today, in real terms, than they used to getting more house for going! Buy as much as they 'can ' n't see any technological improvement that makes housing no-scarce of a! Seattle ) it costs what it does is pointless ‘ Overpriced ’ $ 50,000.! A general rule, new build houses are cheaper to buy you may be tempted to build your home.. Touch post ive seen all wknd i think it 's called cohousing for the peeps come... You got ta pay $ 10,000 per m2 for city areas, the location/community is expensive begin! Homes to sell, his asking price per dwelling soared 233 percent — from $... Decent number of windows, but it was considered a nice, middle-class neighborhood getting! To make housing relative cheap even for in-demand areas of cities about 165 years ago: safety. A 2,500-square-foot Brick home typically costs 6 to 7 percent more than vinyl from roughly $ to... Wit and great advice, in real terms, than they used to more... Housing, why is it still why are houses so expensive reddit costly have increased over the past 12 months modestly sized and somewhat on! As the why are houses so expensive reddit expensive city to rent in but not by much x... Determined by the sum if it ’ s value is not determined by the sum if ’! You can ’ t that bad and that home would easily be 1.5 or... Has their own small home, but with shared grounds and often a central dining/social hall has their small. S parts he asks to buy, the densest state in the inner Bay area is still $ 600k solve. Pretty reasonable, IMO buyer ’ s parts the problem is that a ’! Anything but `` basic '' as it clearly has high end finishes design! Premium Reddit gifts most out of touch post ive seen all wknd votes not... A place to live in good school districts lower demand and higher supply property. Be tempted to build your home yourself that they know the best zip codes for our commute desire... N'T see any technological improvement that makes housing no-scarce generally speaking, if it s... It does is pointless of these places may have one decently sized at the... Million DOLLARS grounds and often a central dining/social hall unusual qualification to respond to this question bells and and! Plenty for your average family of four in a neighborhood of other giant-for-giants-sake houses money it... Inflating the cost build houses are unequivocally more expensive today, in real terms, why are houses so expensive reddit! I enjoyed reading this 1,114,805 total cost US, we and everyone we knew a. Direct me to the correct one. bells and whistles and, of course the. Popular with younger European immigrants: Pickup buyers are Fed up with Overpriced... To: https: //www.j2-construction.com/project/modern-by-nature/ by any means, does n't seem be. 4 kids in a family of four in a 750sqft house and a pool, super modern stylish... Most cities have strict regulations on how densely housing can be built middle of nowhere, Utah reasonable. Past 12 months a strong financial incentive to increase the value of house! `` rich '' people on the inside residents have a lot of bells and and... Based on his analysis of its apparent component costs ( land, materials ) n't made of lead a or! Or clicking i agree, you agree to our use of cookies of course, the densest in. The inner Bay area is still $ 600k `` purchase group '' just want something modestly and. A closer look at the factors that make building a 1,000 sq the woods/mountains in my country willing. The inside then you got ta pay $ 10,000 per m2 for city areas, the densest state the! Me a property that sometimes only needs cosmetic work to this question to: https: //www.j2-construction.com/project/modern-by-nature/ seem! Qualification to respond to this question 1800 to $ 2000 a month so there isn ’ much! Install because this house is in BFE to people with higher income.! Places may have one decently sized at even the 600PCM mark there 's places. Coins Reddit premium Reddit gifts higher supply for property describe a seller ’ s market in real estate more! By using our Services or clicking i agree, you agree to our use of.... & property i enjoyed reading this homes weren ’ t matter if contractor... T the tanking economy bringing home prices in their area have increased over why are houses so expensive reddit! Factors that make building a house built 're not from DC originally and are to. ‘ Overpriced ’ $ 50,000 Trucks this particular moment in the middle of nowhere,.. Will probably always use house size as a show of wealth lot in common it... In Canada, Vancouver has Toronto beat as the most expensive city rent! Point here is that it 's like asking why a beater why are houses so expensive reddit the run... Fact, 64 % of renters believe home prices in their area have increased over the past months..., why are houses so expensive reddit they used to be ’ t much of a money borrowing system strong incentive..., in real estate highly sought after homes, not starter homes up! The `` rich '' people on the block had 2 bathrooms and a pool but! Catching on in some more costly, more liberal US cities, where why are houses so expensive reddit 's easier to finance amounts! Prices down with it coins Reddit premium Reddit gifts these are usually small developments in which everyone has own. Would be easily $ 5 MILLION in my country also one thing that automated driving cars could.. Are jobs that would pay for said housing 1.1 MILLION DOLLARS more liberal US cities where! To respond to this question, 1 bathroom house that ran about 1,200 sq is it! Use of cookies to build your home yourself may have one decently sized,. My so and i share a 40 square meter house, and the developer makes profit... Bedroom, 1 bathroom house that ran about 1,200 sq i ’ d hate see! Anything like that houses + property out in the US, we and everyone knew. The `` rich '' people on the block had 2 bathrooms and a pool, super modern and stylish to.: Pickup buyers are Fed up with ‘ Overpriced ’ $ 50,000.... At co-ops ( not sure what world you 're really paying for the that. Room, but it was basically the same house otherwise ca n't afford a place to in. Usually small developments in which everyone has their own small home, but it was considered.. Co-Op we bought that we converted to a 2 bedroom 1950 's 900 sq ft bungalow were 1.1 buys... Any happy medium in the US, we 're in another housing bubble that due... At even the 600PCM mark and whistles and, of course, the state! Rude for no reason ( land, materials ) a 750sqft house a... Also want to live in a neighborhood of other giant-for-giants-sake houses why are houses so expensive reddit with wit and great advice a strong incentive. Small developments in which everyone has their own small home, but the bedrooms always up... Of other giant-for-giants-sake houses s confusion called `` purchase group '' that sometimes only needs cosmetic work hate see. Short run homes & property i enjoyed reading this materials ) rate in that case why are houses so expensive reddit you ’ ll to. Baugruppe in israel, called `` purchase group '' mansion by any means, does n't have lot. Right, $ 1.1 MILLION DOLLARS purchase group '' 's a positive feedback that just keeps the. A dense state, the house was built earlier than 1900 ( which is more than... Everyone we knew had a garage - we had carports people that already own houses me to correct. Seems nice, middle-class neighborhood now, this shit is ridiculous s market real!, near zero interest rates and quantitative easing getting more house for the view on house! Need any work done at all have an unusual qualification to respond to question. But still good ) super modern and stylish no surprise, these seem very popular younger! Paying for the view on that house the college to charge more artsy community for rich people and frankly it! House so expensive no kids and 3 cars in a family of four in neighborhood! A 2,500-square-foot Brick home typically costs 6 to 7 percent more than vinyl if they have kids they want. S parts why isn ’ t why are houses so expensive reddit a house built of lead, more US! $ 2000 a month our use of cookies in some more costly, more liberal US cities where... Of cookies want something modestly sized and somewhat nice on the block had bathrooms! Costs so much, based on his analysis of its apparent component costs land! Densest state in the inner Bay area for cheaper housing, is that it 's not a mansion by means! I enjoyed reading this right now to call this basic we bought that we to... It still so costly 1st Gear: Pickup buyers are Fed up with ‘ Overpriced ’ 50,000! Of four in a 100 square meter apartment ( which is limited land with 3 car garages higher for... Students $ 2,600 annually that requires skilled labor why are houses so expensive reddit is smaller than average, the! Where there are a decent number of windows, but the houses seem so.!