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Expectations of today's first time buyers are much higher than those of first time buyers in the 1970s. A starter home back then was 1200-1400 sq feet, it had (where I live) a carport, an evaporative cooler, cheap carpet throughout, laminate counters, paper thin cabinets, low end appliances, you get the picture. A generation before that working class home was less than 1000 sf.
Today's first time buyer demands at least 2000 sf and many want two story homes with 3000+. They have two car garages with wifi openers, tile everywhere, granite counters, expensive cabinets, and smart appliances. It's just not apples to apples in the comparison. A starter home is more like a move up or forever home of yesteryear.
So to all those who think that cheap houses on tiny lots are going to solve the problem - think again. Today's buyer does not want that and they are not profitable enough - just like small cars - for builders to invest in them.
We are going to have to come up with something else. Maybe 100 year treasuries and 50+ year mortgages.
First starter home for me was a 2/1 home with a carport in North Miami.
No clue what the sq footage was but it was not a big home.
Expectations of today's first time buyers are much higher than those of first time buyers in the 1970s. A starter home back then was 1200-1400 sq feet, it had (where I live) a carport, an evaporative cooler, cheap carpet throughout, laminate counters, paper thin cabinets, low end appliances, you get the picture. A generation before that working class home was less than 1000 sf.
Today's first time buyer demands at least 2000 sf and many want two story homes with 3000+. They have two car garages with wifi openers, tile everywhere, granite counters, expensive cabinets, and smart appliances. It's just not apples to apples in the comparison. A starter home is more like a move up or forever home of yesteryear.
So to all those who think that cheap houses on tiny lots are going to solve the problem - think again. Today's buyer does not want that and they are not profitable enough - just like small cars - for builders to invest in them.
We are going to have to come up with something else. Maybe 100 year treasuries and 50+ year mortgages.
My first starter home was buying my father's first and only home. It was build in the mid 40's and originally only had one bedroom, but we converted the back porch into a second bedroom for me. The house was 500 SQFT with a detached garage, a wired work shop and an old well house that we converted into the laundry room/screened in cabana. He bought it in 96 for $37,000 and I bought it from him for $67,000 in 2005. Since then, I turned the wired workshop into a one room apartment and rent the house and the apartment for a total of $1500 a month. Or it breaks down to $750 a month for the two families. I could ask for more, but I don't want to be greedy. It's enough to break even on the insurance and taxes. But this house is located just 3 minutes from Palm Beach Island and a minute from PBIA, and because of the location and the size of the property (1/4 of an acre) I could sell it for $700,000 if I wanted to.
Biden is giving 37 billion to contractors/developers to convert empty commercial buildings to residential for affordable housing with tax breaks, special loan rates, etc,
Another bailout the taxpayers will pay for.
Can you imagine what would happen if the government didn't bail out everything that moves?
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Quote:
Originally Posted by SAN_Man
That's not going to make Austin affordable. San Diego's solution to high housing prices was to allow ADUs to be built on the (tiny) lots of SFHs. What that did was increase the value and RE prices continued to explode, along with the rent that the homeowner could get.
You know that right?
Yes it will make it more affordable, at the cost of neighborhood peace.
If you can make 3 dwellings (even a trailer lot) out of what used to be a single family permanent house, that will increase the amount of available housing, driving down the price.
What Austin is toying with, that is EXTREMELY controversial, would solve the problem. As it is, there is zero affordable housing here. (There is section 8, but that's not free market affordable housing).
There's a movement underway to abolish single family housing neighborhood lots. If this goes through, when someone sells a home, the buyer could subdivide the standard lot into 3 individual lots, and can put a building on each of them, even if that's an RV.
If this goes through, affordability will be accomplished. But neighborhoods will have cars parked all over the street, and people will be crammed in like teeth.
I believe they did this in California and the governor here in New York tried to do it a couple years ago but was defeated (which means that even some of the Democrats are against it).
I personally believe it is being pushed by REITS and other real estate companies trying to do away with local zoning so they can maximize profits, regardless of what they do the QOL of the residential communities they are overbuilding in.
If you really want to solve the rent and housing problems, we need to reduce population growth, adding 50 million people in just the last 20 years, mostly from immigration btw, is not sustainable.
What Biden did with the illegal aliens is doing absolutely the opposite of what we should be doing.
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Quote:
Originally Posted by TMSRetired
That will only drive prices even higher via speculation.
No it won't.
It will totally devalue what used to be expensive areas of town, because no one wants to spend a lot knowing there's a very good chance there will be trailers, or duplexes, all around them in 5 years.
It's the complete unpredictability of it that makes housing more affordable.
My point is supply needs to be ramped way up. And the illegals need to be sent home. At the very least you need to build refugee camps for them away from the general population. Make the living standards lousy to discourage more from wanting to come up here. Process them and send most of them home since they have no legitimate reason to be here. Arrest the terrorists that are most certainly in that population.
Where?
A lot of the US does have affordable housing and has far more affordable housing on average than many other first world nations. A small home in rural Arkansas costs under 75k. You can get a job for $12/hour as a mechanic with an GED and afford it. That same small home in the Bay Area might be 2 million and you’ll have a horrible local school district to go along with it and homeless defecating right outside your door.
The issue is a lot of local governments in high cost of living areas provide HUD and other assistance to people that can’t afford to live in the area. The winners of that housing lottery take significant amounts of housing off the market. So now you’ve got absurd situations where some low wage worker (or SSI recipient) is paying $400/month in rent out of pocket living next to people in the same unit paying $3500/month in rent.
When people demand affordable housing what they mean is I want affordable housing in a highly desirable location. If local governments in the US stop the subsidy game a lot of jobs will move out of high cost metro areas to places people could afford too.No one is entitled to live where they want (or everyone would live in Malibu or Maui)
And as I stated in another thread about housing I'm out here in Yakima and you can get a house/apt for around 600 to $800 a month for rent.
On average at $15 an hour pay rate you're looking at $2,400 a month but a lot of the jobs around here believe it or not are not fast food they are mostly drivers construction, trade work and healthcare.
Recent ad for healthcare worker starting out:
Starting Rate of Pay is $20.81
Work hours offer flexibility and variety
Medical, Dental, Vision Insurance is very affordable and available when you work 80 hours or more per month.
I agree. But I am not sure the solution is to get millions of people to move from high cost areas to low cost areas. The reason its cheap where you live or where I live is because demand for rentals and housing in general is lower than high cost years. Sure pressure will be off the more expensive cities and prices might come down a bit. But then Yakima becomes super expensive. And without the higher paying jobs to afford the higer prices. Here too you can find lots of $15-$20 jobs. Lots of openings. Rent a house for $400 a month. Rent a nice house for under $1000. And you can buy a livable smaller home for under $50k.
We need to build more housing. Perhaps smaller dwellings. Really new planned cities need to be developed all over the country. In places that might just be farmland today.
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