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Ok, well, so how would YOU start from first principles to explain what fraction of Americans own outright?
Well not with an island of 1200 homes where people live forever, that's for sure.
Well, one preliminary step is to be clear on the question...which you simply have not been.
But based on what you just posted above, are you asking for explanations on WHY the fraction of owning outright is what it is? We basically know that fraction already.
The whole real estate game is a scam anyway. The value of a home is based on "comps" in the area not the actual value in the materials or how well it was constructed. So if you turned your home into a palace the realtor will value it based on homes of comparable size in the area.
Homes should be valued on the actual cost of materials and cost to build it or upgrade it.
For example lets just say it cost 50k in labor and 75k in materials that house should be valued at 125k at least. Now add things like lot size, location, school district to add value but your home.
If determining the value of the home was done like that most people could and would own a home.
Artificially inflating the value of a home because some remodeled where the materials cost 20k and the labor another 20k should not increase the value of the home by 75k or more. It should simply increase the value by the costs and some profit but certainly not what people get now.
I see "flipped" houses that are bought at auction for under 60k and sold for close to 200k and all they do is the same usual crap like paint, laminate floor, new fixtures, some landscaping, new stainless appliances and granite counter tops. They pay illegal workers to do the work and they increase the value to 200k for doing that? And most of the time it's the same materials anyone can buy at the big box stores like lowes and hd nothing unique just the same chit the next guy has in his house.
Aren't you contradicting yourself?
If I had to bust out a window to save a dying baby, and you had a hammer and I had cash, would I only pay you the value of the wood and iron?
Well not with an island of 1200 homes where people live forever, that's for sure.
Well, one preliminary step is to be clear on the question...which you simply have not been.
But based on what you just posted above, are you asking for explanations on WHY the fraction of owning outright is what it is? We basically know that fraction already.
I don't think you have to reduce to first principles per se but I'd rely on supply and demand, elasticity of demand, and fungibility.
Ok, what I'm trying to get at is why the relationships between the supplies and demands are what they are. Why is the supply of free and clear housing or its cash equivalent so low relative to population?
Ok, what I'm trying to get at is why the relationships between the supplies and demands are what they are. Why is the supply of free and clear housing or its cash equivalent so low relative to population?
Who says it is and what is too low, just right, or too high? You're starting with a conclusion!
Look at all the things we've been trying to tell you...
Homes are not really fungible.
Prevailing area jobs and wages ebb and flow and are unevenly distributed across the country.
Immigration, migration, aging population, family size.
All this and more affect how owners feel about staying or selling.
Not sure its been mentioned, but the value of the home must also factor in the local job market/pay/commute times. Housing is insane around here lately (houses are sold fast/you better have somewhere to move) and i think part of it is the local economy is pretty strong as of right now (not always the case). Obviously things like being close to bodies of water, shopping, etc plays into a value of a home.
We bought 10 years ago and figure to have it paid off shortly...but its still not "free" to live here. You have utilities that continue to increase (electricity prices never seem to drop)-- (need heat/need AC), you have property taxes (which have gone up/down///overall a slight increase in 10 years), INSURANCE (this has definitely increased over the last decade), updating (new couches/tvs/appliances), mechanicals (AC/Furnace/etc)---i know 3 people with less then 15 year old central ac units that have crapped out....think about that... roofs/siding--my brother had a roof last less then 15 years///shingles went to crap (go metal or go home). Also figure in local cellphone providers (some areas are more/bad coverage/etc)...local internet (ours at one point was $30 a month for just internet/now its $60--sure its "faster", but its not like we dl torrents all day long)...
So yes...houses last a long time, and yes it will be nice to be free of a mortgage...you still aren't free. We are all renters in the long run. Our kids will inherit or we will sell to be stuck in a nursing home eating liquid meats and drinking our dinners thru straws in our diapers... or maybe we'll win the health lottery and be capable of staying in our own home into our 80s...who knows.
Ok, why didn't you just say that earlier? Best answer so far.
As if you'd know. Several posters have been talking about all of these things!
Sorry, TBH, you really showed few signs of wanting serious discussion here as opposed to sifting for nuggets to support your pre-held, odd assertions about inheritance and lifespan of a house.
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