Yes, some people over build and others over buy, but it’s a pretty big stretch to go from that to the title of the article. Plenty of people are happy in their custom homes, and stretched to get them.
That there are some who have regrets doesn’t invalidate that fact.
That's what I thought. Put the house in an auction starting at $1 and it will find its price point. Biggest problem is people thinking someone will pay cost-plus-sentimental-value-plus-a-nice-profit when 2 houses could be built on the same dime and under modern standards. Used stuff must be sold at a discount.
That's why they say land is an investment and appreciates; houses depreciate. Bet the land in those remote areas is still worth the small value they paid for it while the houses are losing value by the minute.
Can relate. After moving around a lot we bought our "forever home" 10 years ago. Forever doesn't last that long. A big house owns you. We're trying to sell.
Interesting - we're contemplating buying our forever home in the bay area. Currently living in a 3 story townhouse style that's very walkable to whole foods, parks, caltrain etc. with a modest mortgage but considering moving into the more suburban areas / driving areas so we have a yard to set kids free.
What about the big house is owning you? Mortgage and maintenance?
Speaking as a child of the suburbs, transit-accessible urban areas are a lot nicer for the kids themselves. Even the nicest American suburbs suck for anyone who can’t drive.
Yards are great if you like gardening or have a dog, but I think most people overestimate how much the kids would use a yard. Some do use it a lot, but I think more commonly kids end up indoors, at the park, or in the street even when there's a yard available.
Maybe suburbs sets kids free, but as they get older, the suburbs are a prison. When the only thing teenagers have to do is smoke and drink and go to mcdonalds, life kind of sucks for them.
Mortgage is high, and we could put that money to better use but that's not it. We have yard service, laundry service, weekly cleaning service. But still the maintenance is stressful and overwhelming. 6500 sq. ft of space we mostly don't use. 3 HVAC units. Boat dock, so glad we sold the boat. I long for simpler times. Good years but I don't think I'll miss it much. Too much space fills up with too much stuff that isn't needed. Going through and taking care of stuff takes too much time. All the little things add up. One thing I now know is that space and stuff own you. Need more freedom.
Interesting. I bought a small house (shy of 1500 sq ft) and would kill for an extra 1000 sq ft, despite the fact that it's just the two of us and we don't have kids.
I use 1600 for main living, and 1200 in a nice "unfinished" poured wall walk out basement, with (insulated) concrete floor with no posts, as area for all storage, hobbies, crafts - kids roller skated, skateboarded, build forts, ping pong, foosball, TV, living room furniture, all winter long. I could even drive a car in. And it walks directly outside to an all sports freshwater lake. No additional taxes or insurance on 1200 b/c unfinished. You would not believe how inexpensive built new in the 2000s. People do make mistakes, in my opinion. Just watch how they buy motorhomes; same issue.
Not the parent comment but 1500sqft roughly gets you something in the range of an ordinary 2br 2ba (waving my hands vigorously on room dimensions, whether 2br 2ba is ordinary, etc). That's most people's "basic/ordinary housing needs".
So looking out from that position, people interested in another 1000sqft are usually thinking of hobbies, exercise equipment, shop space, media room, etc.
I’ve found that one of the best investments you can make is a housekeeper and gardener. I have a big house with a big yard and definately could not do it without them. I live in a part of the world in which labor is very cheap so having a fulltime maid isn’t a financial issue. I understand that things might bw different in the US, but I don’t think it’s unaffordable to have someone clean up and do laundry a couple times a week and someone come to cut the grass every month or so. Maybe like $100/day for each? Only a couple hours of work if you are making a standard developer salary.
But it’s just the feeling of freedom that I like about it. My wife can cook things without us worrying about the mess. I can spend my free time as actual free time, instead of worrying about household chores.
Landscaping needs to be done at least every week, and I doubt you will find a house cleaner that does laundry for $100/day. You can assume half of wages go to taxes for independent contractors, plus a premium for it being contract work, so optimistically, $100/day is $50, and even at only 4 hours of work, that’s only $12/hour.
That’s nothing in any higher cost of living city, which is where most high income people want to be. That kind of labor will probably easily run you $200/day or more.
Bleh, what a terrible article full of generalizations.
My wife and I considered building a large 6,000 sqft dream home on acreage but at the end of the day we realized that space wasn’t what made a home a “dream home” but instead utility of the space and the ability for it to support our lifestyle and kids.
Having toured many multi-million dollar homes and having interviewed several architects we now view the opulance and oversized rooms as a liability in the “upkeep” column of our family’s time balance sheet.
We decided to stay in our upper-middle class home and renovate it with things that require less upkeep so we can do more living in the house and less maintaining.
Yeah thats my thought as well, after having a house for 5 years. It's only 1700 sqft but its cost about $100k to replace 1) the siding with hardie board 2) the roof 3) all the bathrooms and kitchen
This house was built in 1981 and basically had zero renovations. I can't imagine trying to remodel a 5000 sqft house after this! I think a lot of these giant McMansion neighborhoods will fall into disrepair after a few decades unless they're in a place where the property values and wages are constantly going up.
Great plan. People spend most of their time in the kitchen these days anyway. Huge homes with giant formal dining rooms and formal living rooms are a waste of money and space. I'll take a home with a comfy, well-equipped kitchen and small family dining space any day.
Totally agree. Once you've got enough rooms to cover everyone's needs (kids don't have to share a room etc), pretty much any extra expansion is just more stuff to clean and maintain. Or if you're rich enough, more stuff to waste money on someone else cleaning and maintaining.
I probably have more of an epicurean outlook than most, but surplus stuff just feels like more stuff for me to worry about.
Plus it takes ages to even get around in really big houses and you're always shouting down the hallway to find where someone is.
Even a master bedroom that could fit a king bed without crowding out other furniture as opulence at one point. My wife and I just finished an open house blitz of 30s vintage colonials in New Jersey, and the vast majority could barely fit a queen in the master.
I agree, although what I meant there was that's about the point where making the house bigger stops providing any meaningful improvement. I know it's possible to make do with a lot less.
When someone posts a picture of a nice elaborate home fixture, you can tell which commenters own a home and which do not. The non-owners say "oh so pretty!!" and the homeowners say "that looks like a pain to clean!".
I did not appreciate modern architecture until I bought a home. I get it now. A dream home is a house you can clean with a squeegee; especially the kitchen and the bathroom.
The worst invention is the ceiling higher than 9ft (or 2.7m). What a waste of energy to heat and cool that space. And the very same homeowners feel good about themselves for recycling.
Although I know it’s hard to even find newer homes without the stupid 2 story foyer and high ceilings, so can’t put all the blames on homeowners who can’t afford to custom build.
Of course, but the the mass developers aren’t going to spend for the proper materials and craftsmanship for that. However, they will spend more to build high ceilings because people think it looks more opulent.
Seems like the real problem is cost/corner-cutting by mass developers, not the design features in houses. If a house is poorly sealed insulated, it doesn't really matter what shape or volume it is.
I've been amazed as to how badly designed new houses can be. Square feet alone, I agree, is a near useless metric.
I'd love to see the user personas that went into the development process. I don't see my needs in there.
A local builder sells a two story model with ZERO bedrooms on the ground floor. If someone is elderly or disabled, or just breaks their leg and needs to be in a wheelchair for two months, the house is basically unlivable.
The number of designs I've seen which devote hundreds of square feet to seperate formal and informal dining areas, and near room-sized alcoves (not isolated enough to make into an office, too big to be a hallway), while still having 10x10 bedrooms, miniscule closets, and claustrophobic bathrooms baffles me.
> A local builder sells a two story model with ZERO bedrooms on the ground floor. If someone is elderly or disabled, or just breaks their leg and needs to be in a wheelchair for two months, the house is basically unlivable.
For better or worse, that has been typical of multi-story houses for over a century.
This was the one thing we insisted on when my wife and I were looking for a house. We have four bedrooms upstairs, but we also have a guest suite with a full bathroom downstairs.
The idea of a separate formal and informal dining room was wasteful. We turned one into an office.
... Eventually these houses will hold four families each, or they’ll go back to woods and fields, slightly formaldehyde-tainted from the lumber. ...
It's interesting to think of the future scenarios that would cause each outcome to play out:
1. Housing continues to skyrocket beyond any reasonable consumer inflation expectation. The only way to "get in" is to go in with one or more other families.
2. Housing prices begin to fall like so many prices throughout the rest of the economy. Nobody wants to take the risk of being stuck with an overly expensive thing they can't unload.
1 almost certainly requires zoning changes to allow multi-family housing in the places people hype these kinds of huge houses today. Don't count on the neighbors to support that, and keep in mind the ones with money will use that money to buy influence.
That zoning change might raise local prices a lot. Neighbours may believe their own property will appreciate in value massively, and approve the zoning change just for that reason, especially if it's advertised that way to them.
Never underestimate the ability of people to ignore everything else, when property price increases are at the forefront of their minds.
No guarantee they will sell. No guarantee they won't.
The idea of them going back to nature is not that far fetched. A lot of well off Detroit residents built large homes a long time ago. Most of them are in the loving embrace of Mother Nature right now.
But it's also possible that someone comes in, bulldozes the whole thing, and then builds something else entirely.
I agree it is possible someone bulldozes it, but I guarantee it sells. It is a desirable location, unlike Detroit. That may change in 50 or even 10 years, but this is simply an example of people overvaluing their own work and taste. If someone does bulldoze it, it will probably be to build an even bigger monstrosity.
I am unsure what that blog post is trying to say, exactly. That some people build big houses and regret it? Some others buy a house and then grow to old to maintain it? Okay, so what? A lot of people build their perfect house and love it. Many people live decades in their home (my parents have been living in their house since 1970...). My dad still mentions to me every time we're sitting in his back yard (an acre filled with trees he planted himself) that it is his dream home and he can't imagine living anywhere else.
If people who guess wrongly bemoan it loudly, while those who guess correctly enjoy it quietly, then all we will hear is regret even if most people get it right.
I think this goes doubly so online, where the loudest voices dominate.
This is why I have reservations about following online trends. It is only part of the picture of what is really going on. There is a silent (silent online) number of people who are just getting on with it quietly as you put it.
This captures a good part of the underlying problem with social media. It is often the disenfrancised and outspoken who dominate the discussion. Many of them don't work and support other activities such as families or hobbies, so they are able to spend that time complaining on the internet.
I think it's fair to point out since homeownership can be a very poor decision if you aren't considering these things when you go all in.
People "guess wrong" about the perception vs. reality of their self all the time over plenty of things, and a lot of it results in them buying junk they rarely or never use. ("I'm totally going to learn how to shred on that ukulele.") Houses are just special given how royally screwed you are when you're trying to get some liquidity out of a several-million dollar asset you stupidly bought because you thought it matched your fantasy lifestyle and realized how wrong you were after it was too late. That said, I don't feel too sorry for these people, but I think it's definitely worth trying to teach others not to make the same mistake.
Yeah, I’m living in my dream house but it cost me less than $500k. When I saw the first example was a $3.5 million home I stopped reading. It’s simple to spot people overbuying (read: guessing wrong). There are lots of people living in their dream homes they’re just not living in multi-million dollar homes.
The article is making the argument that people guess structurally wrong. In the same way that it's perfectly possible under a waterfall design system that you manage to get all of your requirements mostly right from the start, it's also perfectly possible that a family is able to anticipate their needs for a house well into the future before having built/lived in it, but it's a structurally losing game.
An example of an alternative approach championed by a lot of people who want to build houses situated deeply into nature is that they'll live for the first 12 months out of a tent, shifting it to various places on their property. By doing this, they get a feel for how the sun behaves, where the wind moves, where animals like to roam etc. and make a much more informed decision of where to site the house. This is much more akin to the MVP/sprint model of building houses.
Sounds like a statement which can describe far more than a choice of house. Careers, lovers, whether to have children, etc. And even if you guessed right, things can change.
It seems like the main point is that people shouldn’t buy or build houses which are at the limits of their finances, available maintenance time/abilities, and/or space needs, because future changes might push them past those boundaries and force them to move. In many cases people who vastly exceed their own needs end up with a house nobody else wants afterward.
It is not as far as I can tell arguing that every possible “dream house” falls into that category.
Personally I can’t imagine ever wanting a house of >2000 square feet, which would already comfortably fit a large family. But I have several friends with giant mansions full of rooms they never use.
I am honestly unsure what I would use a 7500sqft house for. Not even including the garden/land.
Our (me plus wife and kid) previous apartment was 900sqft, and our house is now 800sqft, and while a bit tight, this works pretty well for our family.
I like the aesthetics of big homes, but practically, I just don’t need all that space. We spend pretty much 80% of the time in the same 250sqft (living).
I think it’s really great when everyone has their own space to hang out. Kids, or teenagers can have their own room. The adults probably share a bedroom, so maybe two extra places they can each make their own is pretty nice.
Nothing needs to be huge, but I think a door is a pretty big deal.
800 sq ft? It's not super small, but the average size of a 2 bedroom apartment in the US.
Personally, have the extra space is nice up to a point. I'd say 1200 sq ft is good for a family of 3. Can you make it work with less? Of course, but the extra space has a lot of utility.
>* I'd say 1200 sq ft is good for a family of 3...*
Sigh.
And then your daughter becomes a teenager. (I'm in 1100 sq ft. But that was intentional, so we just have to deal with it now. She'll be in college next year, so there's light at the end of the tunnel.)
You ever feel like the kid makes the place feel small? That's a big thing with my kids in our ~1200sqft house, particularly during a long stretch of cold/rainy weather. If you have any tips I'd love to hear 'em!
With one kid of 7 months it’s pretty doable. We also more or less anticipated that by basically having the entire living aside from (smallish) dining table and sofa be the playground.
I’m not sure it would work with 2 of them, but it will probably be fine with one.
> I am honestly unsure what I would use a 7500sqft house for. Not even including the garden/land.
I want some land so I can plant fruit and nut trees, and build a couple raised garden beds.
> Our (me plus wife and kid) previous apartment was 900sqft, and our house is now 800sqft, and while a bit tight, this works pretty well for our family.
I couldn't do that. I lived alone in 980sf, and that felt tight. Granted, I turned my second bedroom into an electronics/computer lab and own a lot of books, but on top of that the kitchen was tiny and storage for clothes, linens, and household items seriously lacking.
We have a 3000 square foot house (less than $340K) in the burbs. We have 5 bedrooms and when we bought it, my (step)son was 15.
We had a purpose for each room of the house.
- the formal dining room was closed off and turned into an office.
- guest bedroom downstairs with a full attached bath. Our parents are getting older and it’s just nice to have a separate bedroom downstairs for even “temporary” disabilities.
- of course the master bedroom for my wife
- bedroom for our teenage son
- bedroom turned into a home gym with weights, a weight bench, treadmill, elliptical, and soon stationary bike
- bedroom for my wife to have as a personal study and a game room when my son’s friends come over.
We stayed well under budget, and chose to move about 10 miles out and bought a house for half the price with still good schools.
Finally, we had each room wired for gigabit Ethernet.
“How buildings learn” is a book every software engineer should read. The thesis of the book is that we predominantly take an aesthetic judgement of buildings as static spaces and this pushes us into processes that are big design up front.
HBL makes the argument that all buildings will intrinsically change in need and purpose over time and “great” buildings are those who have adaptability built in. He points to Building 20 at MIT as an example of a building that was accidentally built to be adaptable and generally ignored within architecture circles but beloved by the building inhabitants.
This is one of my favorite books of all time. I read it while remodeling my house (and am also a software engineer), and I bought 5 copies to give away afterward.
How do these non-tech, low-quality, overgeneralized articles make it to the top of HN these days? Voting broken or does it really appeal to the HN audience?
It’s certainly possible to draft a list of true needs, and wants that are unlikely to change, and systemically search for or build a property that meets them without introducing new needs or wants. For us, it’s a 2,000 sq ft Sears kit bungalow we purchased after considering whether we could live the rest of our lives here and whether our children would be likely to appreciate having growing up in it.
Apologies that this isn't a particularly constructive comment, but I have to say:
There is little more I hate in the world than articles that have a full sentence as some header text and then repeat that exact sentence almost immediately in the paragraph following the header text.
I feel like I've been tricked into reading the same sentence twice. My precious time has been wasted. (I'm half-joking.) In the case of this article:
> A house is an investment, except it’s also a necessity, and it’s also an expression of status, which together make the investment wildly expensive and illiquid.
This sentence exists twice. Why include it as a header? The sentence is long enough and this isn't poetry, so it is fair to assume the repetition wasn't for any sort of artistic effect. Just leave that sentence within the context of the paragraph where it's written. Maybe even bold it, but the reader shouldn't have to look at those words twice.
I can maybe understand it when it's a quote from another person, under some arbitrarily small word count, like ten. I assume there are some rules in journalistic writing that allows for that style, such that it's normalized to the reader.
Those aren't headers, they're pull quotes. Badly formatted to look just like a header. Also, I hate pull quotes for the same reason you do. I can't not read them, and half the time they're something I already read, half the time they're something I'm about to read anyway. I just don't see the point.
Pull quotes don't belong on the web. They made sense when people were thumbing through magazines, not lists of website headlines. If I click your headline, I'm already going to read the article.
I don't get the point of this article. Some people regret buying mansions?
I agree that as someone who is passively looking and going to the occasional open house, my "dream home" is one that is 1) in an urban center 2) does not require a car to get to/from 3) is priced so that the mortgage payment is comfortably below what I expect to earn 4) has a good amount of natural light 5) small enough to easily maintain and 6) the small space is functional.
Basically, I just want a small, functional, well-designed space in an urban center within budget.
I don't know how or even really if it applies, but the phrase "too clever by half", and in particular the article that has appeared here several times before [1] came to mind.
Also a thing I've thought about, which is echoed in the opening bits of the article, is that many people will buy or build a starter home, and then over time build it up into something much fancier or larger. At which point, it isn't really a starter home anymore, and who is going to want to buy such a thing when they could just do the same over time except in the style they actually wanted?
It's always entertaining to look through the older Zillow listings for moderately to very expensive houses. Without fail they are testaments to bad taste. They'd cost a sizable percentage of the purchase price to renovate. Yet, the owners just keep holding out hope that someone with equally bad taste will eventually come along and snap it up.
I’m thought this article was going to be about McMansions losing value over time, but just seemed like an opinion piece with a couple of anecdotes about elderly people having problems selling very expensive estates.
What’s interesting is that the valuations mentioned for McMansions are... like an order of magnitude cheaper then the multimillion dollar estates mentioned in this piece.
> Boomers currently own 32 million homes and account for two out of five homeowners in the country.
So... given that boomers are less than 10% of the population but are 40% of the homeowners, I suspect there will be a strong downward pressure long term, since, well, all these boomers are probably in their home before “the home”.
Yeah, I was just going to say -- look at places like Greece. The home ownership rate is about ~75%. It's pretty common for people to own multiple homes, too.
The average Greek person is not wealthy, but the value of these homes is not insignificant either. Mostly, Greek people live like they're poor, even though -- in theory -- their real estate holdings are worth a small fortune.
I met a Greek lady with 4 houses, one of which was on a super desirable island now -- worth well over $2.5M. She can only afford to visit the island once a year for a week, but she refuses to sell the house. Not because she's speculating on the value continuing to increase. Just purely for sentiment.
People are strangely attached to homes. And also (most) people see homes as good investments. Recent history is really working as confirmation biases for that. But long-term, objectively, housing has been an okay investment.
I just can't see all that collapsing because of a little downward pressure. Especially when it DEFINITELY hasn't happened in most aging countries.
One could argue that it has happened in Japan. But Japan's real estate boom in the 90s was truly unbelievable.
So it's really hard to say if house prices have gone down in real terms -- or if they were just so ridiculously insane in the 90s that it had a long-lasting anchor effect on prices ever since.
I’m not sure what the nominal tax rates are in Greece, but the level of tax dodging in that country is famously high, I wouldn’t be surprised if effective property taxes are very low.
Michael Lewis in his book Boomerang details this hilariously: The Greeks wanted to turn their country into a pinata stuffed with cash and allow as many citizens as possible to take a whack at it. I believe he said the effective tax rate is under 12%. RE tax he said basically nobody pays.
But then you have a flat in the city, and a big house in the country that at best gets used at the weekends. But then you have upkeep of 2 houses so you're not really that well off, despite having a mansion in the country.
Or the kids realise this, sell the homes, and you still have the downward pressure on prices. (probably more so, as they'll want a quick sale)
In theory yes. My anecdotes are not data, but I am seeing a bit of this now as I am seeing grandparents pass. The common theme is that the houses haven't so much as a coat of paint in 20 years, they are outdated and not in great condition. This is assuming they stayed in the same neighborhoods where the kids were raised. There is a whole other level of undesirability when they bought a condo in Florida (or wherever).
The kids generally have houses, they don't need/want an extra house. Usually there are multiple kids involved, so unless it is distinctly given to one child, it becomes problematic to do anything other than just turn it into a liquid asset and split the proceeds.
This may vary by region, but at least in the Northeast, property taxes are very expensive. Keeping a house around as a spare is just too big of a burden. In the age of AirBnb, there may be some other options.
In all cases I have seen thus far amongst family/friends, the house gets sold.
The only group that doesn't seem to have declined in the last 15 years is 65 and over.
This is where I think the large size of the US and the tons of domestic migration won't really make inheriting a home as common as you would find in most of the world.
Anecdotally, I know nobody that I went to high school with that is remotely close to our home town - we all left. This is roughly 50 people, and I'm sure that all of them, like me, would not think twice about selling any property inherited from parents.
Some number less than 100% of the current US population owns 100% of the homes, though, since tens of millions of people (due primarily to age or resources) do not own real estate. Thus, using a percentage of the total population this way, outside of that context, doesn't really mean much.
“spent about $3.5 million in 2009 to build their dream home: a roughly 7,500-square-foot, European-style house“ er no that is not European we mostly live in much smaller apartments or houses.
European-style is referring to the architecture, not how people in Europe live. I don’t think anyone is laboring under the impression that Europeans all live in 7.5k sqft houses.
I'm in the process of purging a large portion of my possessions. I spent a distressing amount of money collecting items that got used once or twice, got put into a closet that cost me a lot to rent (hooray Socal!), and now are taking up a large amount of my mental space trying to find a way to ethically and economically dispose of them.
I cannot possibly imagine how much useless crap you can accumulate in a 2,000 ft home, let alone 7,000 or larger! Why in the world would you want all that space?
Yes. It'll be fun, and magic, and amazing. And then you need to get a new piece of furniture on the 4th floor. A little bit later, you break a leg, and everything but the ground floor is off limits for weeks.
You slowly age. Climbing stairs is not as easy as it used to be. Whenever you want to talk to your spouse, they're guaranteed to be 2 floors away.
It's a dream home, but I'm not sure it'll survive reality.
I had a 3 story apartment once with like a room on each level. It sounds cool, but it’s terrible. Don’t underestimate how terrible it is to climb 30 flights of stairs a day.
Let's say you're on ground level, and need to fetch something from the fourth floor. The walk upstairs, even if you're young and healthy, will increase your heart rate and, esp. depending on temperature and what you're wearing, can get you sweating a little bit. Who needs it in their daily lives.
True, but maybe that would encourage us to really think about what we place on each floor, to partition them for different workflows/mindsets/moods without overlap, which could lead to better focus, better work and better play.
Why not wear backpack full of rocks the whole time then, it's an extra activity, makes you stronger etc. I think the reason why people don't do that, is that, while often the extra activity/burden is really beneficial, the fact that you can't turn it off can really be a problem sometimes. Say - you have a bad flu and can barely walk around the house, or are in a hurry to get out of the door, but need to run to the fourth floor to fetch someting (it takes a while - I know, I live on a fourth floor in a building with no elevator). The non-optionality is the problem.
Funny you mention rocks in the backpack, that sort of resembles my training when I go for some higher mountains (walking up stairs with heavy backpack). I guess everybody has different perspective on life and priorities
That's training, the rocks in backpack make sense then (I too sometimes load my backpack with heavy books when I go for a long walk). It's very different from it having strapped to your body forever.
Apparaently people don't watch enough of 'BBC Grand Design' and also 'YouTube Tinyhouses'.
Otherwise they would know better :D
1600 sqft sounds relativly big to me and would double the space we have. But size is less important than:
- Having light! Srsly like natural brightness
- Good connection to work / city live
- nice garden with a view
- smart building design like having a extra room for washing cloth, power sockets which are well positioned etc.
Sure there are. But you can overdo it, or outlive it.
The Bay Area's finest example of outliving it is Filoli. It's a estate off 280 near 92. More than one square mile, in Silicon Valley. At the end, it was occupied by one woman in her 90s, along with a large staff.
(It's now open to the public. There are tours and a cafe. The house is big, but not monumental, like San Simeon. Mostly the place is gardens and pastures.)
I was momentarily outraged, until I found it on a map. The San Andreas fault runs _right_ through the center of the property. Makes me glad it's basically a garden now and not a housing development =)
> Ben and Valentina Bethell spent about $3.5 million in 2009 [..]. The couple listed the home in 2015 for $4.495 million, and have since reduced the price to $3.995 million.
It's somewhat insane that houses are automatically assumed to appreciate. They have lived in the house for a decade, and it's no longer brand new. Why should the purchase price now be half a million more than the construction costs were?
You’re mostly correct in this case, but for more commoditized houses or complexes, that can generate income, the reasoning is as follows:
There’s always significant uncertainty in construction: timelines, permits, cost overruns, contractor vetting, etc. In addition, two years you spend building are two years of rents that you don’t collect. As a result, there’s usually a premium, sometimes a significant one, for having something already built.
The amount of the premium varies depending on how those factors interrelate in a given market, and of course speculative appetite in that market also comes into play.
Unless someone is going out of their way to buy a brand new home, nobody cares about the age. You have the home inspected, and if the roof is good (replaced recentlyish) and there's no structural damage, your good to go. It's not like depreciation on a used car. A house is a house.
Hell, lots of times newer homes are more shoddily built then older ones.
There are things which survive centuries like walls, and then stuff that slowly disintegrates and is a proper nightmare to change/replace - plumbing, electric wiring, general room layout with those thick structural walls, size/layout of windows etc.
I can guarantee you that electric wiring from 1970 is something different than that from 2010 (personal experience, sockets slowly failing).
Old apartment/house is definitely an additional maintenance cost and possibly tons of other inconveniences, and should be priced accordingly.
Because location is not fungible. Desirable places to live stay desirable many times because high income people compete with each other to live there, hence when incomes go up, so do the prices they’re willing to pay. The good schools with all the children of educated parents are there, as are the facilities, stores, restaurants, airports, mass transit, weather, parks, etc. The supply of places with a combination of all of those things is very limited compared to demand.
Places that don’t have many high income people competing don’t see this kind of appreciation.
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[ 0.33 ms ] story [ 305 ms ] threadThat there are some who have regrets doesn’t invalidate that fact.
What about the big house is owning you? Mortgage and maintenance?
So looking out from that position, people interested in another 1000sqft are usually thinking of hobbies, exercise equipment, shop space, media room, etc.
But it’s just the feeling of freedom that I like about it. My wife can cook things without us worrying about the mess. I can spend my free time as actual free time, instead of worrying about household chores.
That’s nothing in any higher cost of living city, which is where most high income people want to be. That kind of labor will probably easily run you $200/day or more.
My wife and I considered building a large 6,000 sqft dream home on acreage but at the end of the day we realized that space wasn’t what made a home a “dream home” but instead utility of the space and the ability for it to support our lifestyle and kids.
Having toured many multi-million dollar homes and having interviewed several architects we now view the opulance and oversized rooms as a liability in the “upkeep” column of our family’s time balance sheet.
We decided to stay in our upper-middle class home and renovate it with things that require less upkeep so we can do more living in the house and less maintaining.
This house was built in 1981 and basically had zero renovations. I can't imagine trying to remodel a 5000 sqft house after this! I think a lot of these giant McMansion neighborhoods will fall into disrepair after a few decades unless they're in a place where the property values and wages are constantly going up.
I probably have more of an epicurean outlook than most, but surplus stuff just feels like more stuff for me to worry about.
Plus it takes ages to even get around in really big houses and you're always shouting down the hallway to find where someone is.
In fact:
> Once you've got enough rooms to cover everyone's needs (kids don't have to share a room etc)
This would have been considered opulence 40 years ago.
Although I know it’s hard to even find newer homes without the stupid 2 story foyer and high ceilings, so can’t put all the blames on homeowners who can’t afford to custom build.
I'd love to see the user personas that went into the development process. I don't see my needs in there.
A local builder sells a two story model with ZERO bedrooms on the ground floor. If someone is elderly or disabled, or just breaks their leg and needs to be in a wheelchair for two months, the house is basically unlivable.
The number of designs I've seen which devote hundreds of square feet to seperate formal and informal dining areas, and near room-sized alcoves (not isolated enough to make into an office, too big to be a hallway), while still having 10x10 bedrooms, miniscule closets, and claustrophobic bathrooms baffles me.
For better or worse, that has been typical of multi-story houses for over a century.
The idea of a separate formal and informal dining room was wasteful. We turned one into an office.
It's interesting to think of the future scenarios that would cause each outcome to play out:
1. Housing continues to skyrocket beyond any reasonable consumer inflation expectation. The only way to "get in" is to go in with one or more other families.
2. Housing prices begin to fall like so many prices throughout the rest of the economy. Nobody wants to take the risk of being stuck with an overly expensive thing they can't unload.
Never underestimate the ability of people to ignore everything else, when property price increases are at the forefront of their minds.
The idea of them going back to nature is not that far fetched. A lot of well off Detroit residents built large homes a long time ago. Most of them are in the loving embrace of Mother Nature right now.
But it's also possible that someone comes in, bulldozes the whole thing, and then builds something else entirely.
Anything could happen.
And yes, some people guess wrong.
But that article thinks everyone guesses wrong.
I think this goes doubly so online, where the loudest voices dominate.
My personal experience is people are most likely to enjoy a home that’s easy for them to afford as it never feels like a burden.
People "guess wrong" about the perception vs. reality of their self all the time over plenty of things, and a lot of it results in them buying junk they rarely or never use. ("I'm totally going to learn how to shred on that ukulele.") Houses are just special given how royally screwed you are when you're trying to get some liquidity out of a several-million dollar asset you stupidly bought because you thought it matched your fantasy lifestyle and realized how wrong you were after it was too late. That said, I don't feel too sorry for these people, but I think it's definitely worth trying to teach others not to make the same mistake.
An example of an alternative approach championed by a lot of people who want to build houses situated deeply into nature is that they'll live for the first 12 months out of a tent, shifting it to various places on their property. By doing this, they get a feel for how the sun behaves, where the wind moves, where animals like to roam etc. and make a much more informed decision of where to site the house. This is much more akin to the MVP/sprint model of building houses.
It is not as far as I can tell arguing that every possible “dream house” falls into that category.
Personally I can’t imagine ever wanting a house of >2000 square feet, which would already comfortably fit a large family. But I have several friends with giant mansions full of rooms they never use.
Our (me plus wife and kid) previous apartment was 900sqft, and our house is now 800sqft, and while a bit tight, this works pretty well for our family.
I like the aesthetics of big homes, but practically, I just don’t need all that space. We spend pretty much 80% of the time in the same 250sqft (living).
I would love me a garage/workspace though.
Nothing needs to be huge, but I think a door is a pretty big deal.
Personally, have the extra space is nice up to a point. I'd say 1200 sq ft is good for a family of 3. Can you make it work with less? Of course, but the extra space has a lot of utility.
Sigh.
And then your daughter becomes a teenager. (I'm in 1100 sq ft. But that was intentional, so we just have to deal with it now. She'll be in college next year, so there's light at the end of the tunnel.)
I’m not sure it would work with 2 of them, but it will probably be fine with one.
I want some land so I can plant fruit and nut trees, and build a couple raised garden beds.
> Our (me plus wife and kid) previous apartment was 900sqft, and our house is now 800sqft, and while a bit tight, this works pretty well for our family.
I couldn't do that. I lived alone in 980sf, and that felt tight. Granted, I turned my second bedroom into an electronics/computer lab and own a lot of books, but on top of that the kitchen was tiny and storage for clothes, linens, and household items seriously lacking.
We had a purpose for each room of the house.
- the formal dining room was closed off and turned into an office.
- guest bedroom downstairs with a full attached bath. Our parents are getting older and it’s just nice to have a separate bedroom downstairs for even “temporary” disabilities.
- of course the master bedroom for my wife
- bedroom for our teenage son
- bedroom turned into a home gym with weights, a weight bench, treadmill, elliptical, and soon stationary bike
- bedroom for my wife to have as a personal study and a game room when my son’s friends come over.
We stayed well under budget, and chose to move about 10 miles out and bought a house for half the price with still good schools.
Finally, we had each room wired for gigabit Ethernet.
HBL makes the argument that all buildings will intrinsically change in need and purpose over time and “great” buildings are those who have adaptability built in. He points to Building 20 at MIT as an example of a building that was accidentally built to be adaptable and generally ignored within architecture circles but beloved by the building inhabitants.
There is little more I hate in the world than articles that have a full sentence as some header text and then repeat that exact sentence almost immediately in the paragraph following the header text.
> A house is an investment, except it’s also a necessity, and it’s also an expression of status, which together make the investment wildly expensive and illiquid.
This sentence exists twice. Why include it as a header? The sentence is long enough and this isn't poetry, so it is fair to assume the repetition wasn't for any sort of artistic effect. Just leave that sentence within the context of the paragraph where it's written. Maybe even bold it, but the reader shouldn't have to look at those words twice.
I can maybe understand it when it's a quote from another person, under some arbitrarily small word count, like ten. I assume there are some rules in journalistic writing that allows for that style, such that it's normalized to the reader.
I agree that as someone who is passively looking and going to the occasional open house, my "dream home" is one that is 1) in an urban center 2) does not require a car to get to/from 3) is priced so that the mortgage payment is comfortably below what I expect to earn 4) has a good amount of natural light 5) small enough to easily maintain and 6) the small space is functional.
Basically, I just want a small, functional, well-designed space in an urban center within budget.
Also a thing I've thought about, which is echoed in the opening bits of the article, is that many people will buy or build a starter home, and then over time build it up into something much fancier or larger. At which point, it isn't really a starter home anymore, and who is going to want to buy such a thing when they could just do the same over time except in the style they actually wanted?
[1] https://www.epsilontheory.com/too-clever-by-half/
Here’s an article about McMansion depreciation: https://www.fa-mag.com/news/mcmansions-define-ugly-in-a-new-...
What’s interesting is that the valuations mentioned for McMansions are... like an order of magnitude cheaper then the multimillion dollar estates mentioned in this piece.
So... I looked for the WSJ article this was really a response to: https://www.wsj.com/articles/a-growing-problem-in-real-estat...
What is actually concerning was this statement:
> Boomers currently own 32 million homes and account for two out of five homeowners in the country.
So... given that boomers are less than 10% of the population but are 40% of the homeowners, I suspect there will be a strong downward pressure long term, since, well, all these boomers are probably in their home before “the home”.
The average Greek person is not wealthy, but the value of these homes is not insignificant either. Mostly, Greek people live like they're poor, even though -- in theory -- their real estate holdings are worth a small fortune.
I met a Greek lady with 4 houses, one of which was on a super desirable island now -- worth well over $2.5M. She can only afford to visit the island once a year for a week, but she refuses to sell the house. Not because she's speculating on the value continuing to increase. Just purely for sentiment.
People are strangely attached to homes. And also (most) people see homes as good investments. Recent history is really working as confirmation biases for that. But long-term, objectively, housing has been an okay investment.
I just can't see all that collapsing because of a little downward pressure. Especially when it DEFINITELY hasn't happened in most aging countries.
One could argue that it has happened in Japan. But Japan's real estate boom in the 90s was truly unbelievable.
So it's really hard to say if house prices have gone down in real terms -- or if they were just so ridiculously insane in the 90s that it had a long-lasting anchor effect on prices ever since.
You mean the 80s. The 90s saw a real estate price collapse in Japan.
Or the kids realise this, sell the homes, and you still have the downward pressure on prices. (probably more so, as they'll want a quick sale)
The kids generally have houses, they don't need/want an extra house. Usually there are multiple kids involved, so unless it is distinctly given to one child, it becomes problematic to do anything other than just turn it into a liquid asset and split the proceeds.
This may vary by region, but at least in the Northeast, property taxes are very expensive. Keeping a house around as a spare is just too big of a burden. In the age of AirBnb, there may be some other options.
In all cases I have seen thus far amongst family/friends, the house gets sold.
I just looked up home ownership rates by age group: https://www.census.gov/housing/hvs/data/charts/fig07.pdf
The only group that doesn't seem to have declined in the last 15 years is 65 and over.
This is where I think the large size of the US and the tons of domestic migration won't really make inheriting a home as common as you would find in most of the world.
Anecdotally, I know nobody that I went to high school with that is remotely close to our home town - we all left. This is roughly 50 people, and I'm sure that all of them, like me, would not think twice about selling any property inherited from parents.
Citation needed... I think they gotta be more than 20%.
https://www.pewresearch.org/fact-tank/2018/03/01/millennials...
Still, less than 10% of the US population owns 40% of the homes.
And the reply on McMansion Hell[0]:
> we did it folks #i didnt mean to crash the boomer economy
[0]: http://mcmansionhell.com/post/183614671911/we-did-it-folks
I cannot possibly imagine how much useless crap you can accumulate in a 2,000 ft home, let alone 7,000 or larger! Why in the world would you want all that space?
A 4+ story vertical structure with 1-2 rooms per level, leaving more ground space for a garden/hedge maze etc.
I wonder if more of us introverted techy types would prefer that too.
Would it be impractical?
At least it does for me.
You slowly age. Climbing stairs is not as easy as it used to be. Whenever you want to talk to your spouse, they're guaranteed to be 2 floors away.
It's a dream home, but I'm not sure it'll survive reality.
it it a proper concern for elderly/disabled, but for young what you describe sounds more like an advantage
Otherwise they would know better :D
1600 sqft sounds relativly big to me and would double the space we have. But size is less important than: - Having light! Srsly like natural brightness - Good connection to work / city live - nice garden with a view - smart building design like having a extra room for washing cloth, power sockets which are well positioned etc.
The Bay Area's finest example of outliving it is Filoli. It's a estate off 280 near 92. More than one square mile, in Silicon Valley. At the end, it was occupied by one woman in her 90s, along with a large staff.
(It's now open to the public. There are tours and a cafe. The house is big, but not monumental, like San Simeon. Mostly the place is gardens and pastures.)
I was momentarily outraged, until I found it on a map. The San Andreas fault runs _right_ through the center of the property. Makes me glad it's basically a garden now and not a housing development =)
It's somewhat insane that houses are automatically assumed to appreciate. They have lived in the house for a decade, and it's no longer brand new. Why should the purchase price now be half a million more than the construction costs were?
There’s always significant uncertainty in construction: timelines, permits, cost overruns, contractor vetting, etc. In addition, two years you spend building are two years of rents that you don’t collect. As a result, there’s usually a premium, sometimes a significant one, for having something already built.
The amount of the premium varies depending on how those factors interrelate in a given market, and of course speculative appetite in that market also comes into play.
Hell, lots of times newer homes are more shoddily built then older ones.
I can guarantee you that electric wiring from 1970 is something different than that from 2010 (personal experience, sockets slowly failing).
Old apartment/house is definitely an additional maintenance cost and possibly tons of other inconveniences, and should be priced accordingly.
Places that don’t have many high income people competing don’t see this kind of appreciation.
> https://thetinylife.com/what-is-the-tiny-house-movement/
> https://en.wikipedia.org/wiki/Tiny_house_movement
> https://duckduckgo.com/?q=tiny+house+movement&t=ffab&atb=v15...