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Old 08-08-2014, 10:48 AM
 
2,824 posts, read 3,347,681 times
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Quote:
Originally Posted by mkarch View Post
I have to ask why you think the "hamster style housing" is so expensive compared to the SFH's out by the urban growth boundary if it's so undesirable. The person that spends $500K on a condo or town home could have gained land and saved money buying one of the $300K houses out on the edge. It's not unusual to see "hamster houses" selling for $350+ sq ft, while rural homes of the same age/size typically sell for under $150/sq ft.
There's always a rube that can be convinced to buy a condo.
Why are you using $/sf as a metric when comparing apples and oranges?
That's never been a legitimate metric. Sure real estate agents will hype it but the only time it could have any legitimate value is when talking about properties with the same amount of land (because you are ignoring the land value), constructed about the same time, sitting in about the same geographic location, having the same footprint and features, and having the same quality of build.

Quote:
Originally Posted by mkarch View Post
Basic supply/demand would lead to the conclusion that the 'far out' houses are more plentiful and less desirable, otherwise people would pay more for them. Likewise, the supply relative to demand would seem to indicate that the growth boundary isn't restricting supply in a meaningful way. Add to that, the houses out near the boundary have much higher foreclosure rates. For King County, it's on the order of 20-50 times higher! People move out there then abandon their homes at a much greater frequency.
There is no free market.
There is not enough information to make any conclusion about possible causes for such activity.
However, one could speculate that King County does not have the jobs to support the cost of living there.
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Old 08-08-2014, 11:20 AM
 
5,076 posts, read 8,501,505 times
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Quote:
Originally Posted by IC_deLight View Post
There's always a rube that can be convinced to buy a condo.
Why are you using $/sf as a metric when comparing apples and oranges?
That's never been a legitimate metric. Sure real estate agents will hype it but the only time it could have any legitimate value is when talking about properties with the same amount of land (because you are ignoring the land value), constructed about the same time, sitting in about the same geographic location, having the same footprint and features, and having the same quality of build.



There is no free market.
There is not enough information to make any conclusion about possible causes for such activity.
However, one could speculate that King County does not have the jobs to support the cost of living there.
You seem to be working back from the conclusion that any property YOU personally wouldn't buy is worthless to everyone. Meanwhile you're ignoring the millions of purchases every year that weren't made by you, as if they're all outliers that must be discarded in order to "really understand" the state of the market.

PPSF is what it is - a comparison of what people are willing to pay for a given amount of living space. It's particularly telling that the same square footage with land is worth so much less, and it's not just because recent buyers don't like to mow the lawn.

I think you're missing the obvious because it doesn't fit into your model. The houses out near the king county growth boundary are not in demand because they're farther out than most people are willing to accept, not because the county lacks jobs. IE: the majority of people who can afford them would rather live somewhere else. In this case, that somewhere else is nearly always going to be much more dense and urban since you can't get much less dense and less urban than it is near the growth boundary.
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Old 08-08-2014, 11:23 AM
 
Location: Seattle, WA
2,975 posts, read 4,078,123 times
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Quote:
Originally Posted by mkarch View Post
It gets built even when there are alternatives. Thousands of new high density units were built in my area at the time when thousands of unwanted edge homes were sitting vacant or in foreclosure.
We are also seeing housing stagnate in some of the outermost housing developments in the Miami area--especially Homestead (which is really the only place with lots of undeveloped land within the urban development boundary). There were lots of new gated suburban developments in the early 2000's in what was mainly rural land, but those are now one of the few neighbourhoods which are not strong seller's markets now. Meanwhile, there is impressive demand for those $300k-and-upwards 1-br condos downtown, and dozens of old buildings in Miami Beach that are being renovated. Even planned and ongoing development adjacent to Metrorail stations in the Overtown ghetto.

Our more established outer suburbs like Pembroke Pines, Weston, Miami Lakes, and west Kendall are actually doing pretty well, though, so there is still strong demand for the longer established suburbs. There's just not as much demand for widespread development of new suburbs at the edge of town.
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Old 08-08-2014, 12:01 PM
 
5,076 posts, read 8,501,505 times
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Quote:
Originally Posted by hurricaneMan1992 View Post

Our more established outer suburbs like Pembroke Pines, Weston, Miami Lakes, and west Kendall are actually doing pretty well, though, so there is still strong demand for the longer established suburbs. There's just not as much demand for widespread development of new suburbs at the edge of town.
That's what I'm seeing as well. When comparing like properties (age, size, condition, lot) between the cities and suburbs, the West Bellevue area along with Mercer Island have the highest prices, and they're two of the few areas that sell at a premium to most of Seattle proper. Both are fairly unique, as MI is the only suburb adjacent to downtown, and West Bellevue is actually pretty urban, so the 'suburban style' homes just outside the core are in very high demand. In order of desirability, the close in premium suburbs are top, the city itself is second, new high end suburbs with good access are third, and the far out areas supposedly affected by the growth boundary are way off at the bottom, even below the areas that were traditionally filled with the urban poor - IE: old public housing complexes that were removed and rebuilt as mixed income.

The most important comparison in my opinion is what people are willing to pay for an average sized SFH zoned lot. In the really high end areas, it might be over a million for 10,000 sq ft of land. Average "high demand" neighborhoods are around $350K for a 5000 sq ft city lot. Then there's the hinterlands, where the land is worth very little. Average lots might run $80K or less. What's clear from this is people are paying for the location, not "OMG, the growth boundary has made it impossible for me to find a rural house, so instead I'm forced to spend 2-3 times as much on something more urban"
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Old 08-08-2014, 12:40 PM
 
2,824 posts, read 3,347,681 times
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Quote:
Originally Posted by mkarch View Post
You seem to be working back from the conclusion that any property YOU personally wouldn't buy is worthless to everyone. Meanwhile you're ignoring the millions of purchases every year that weren't made by you, as if they're all outliers that must be discarded in order to "really understand" the state of the market.

PPSF is what it is - a comparison of what people are willing to pay for a given amount of living space. It's particularly telling that the same square footage with land is worth so much less, and it's not just because recent buyers don't like to mow the lawn.
No, because the same metric is being used when comparing houses on land. The point is that it is a useless metric for anyone but the truly brainless.

Land does have value so you resort to a different statistic to try to ignore it. The purchase price is what people are paying. Your "price per square foot" is a number that can be computed but it has poor representation of any market since it doesn't account for the land. The only time the metric become mathematically comparable is when the properties are nearly identical and the land component is the same such it can be crossed off both sides.

Your "metric" is as useless as generating price per square foot based solely on kitchen area or price per square foot based solely on garage size or price per chimney. It doesn't reflect what the purchaser is buying in any example.

Quote:
Originally Posted by mkarch View Post
I think you're missing the obvious because it doesn't fit into your model. The houses out near the king county growth boundary are not in demand because they're farther out than most people are willing to accept, not because the county lacks jobs. IE: the majority of people who can afford them would rather live somewhere else. In this case, that somewhere else is nearly always going to be much more dense and urban since you can't get much less dense and less urban than it is near the growth boundary.
I'm not impressed with your math skills given your price per square foot logical fallacy - and it is a fallacious argument.

Regarding King County or anywhere else, all I've seen you your say-so statistics in your attempts to marginalize anyone "not in the city" in your efforts to promote dense housing. Nonetheless, your conclusion doesn't hold in this example either. It sounds like your county didn't have jobs to support the economic demographic of the owners of the property on the outskirts - and it's not likely they moved to a more expensive place to live.

It's kind of difficult to get much more presumptious than your statement: "IE: the majority of people who can afford them would rather live somewhere else. In this case, that somewhere else is nearly always going to be much more dense and urban since you can't get much less dense and less urban than it is near the growth boundary."

You are starting from the absurd premise (and snob argument) that the majority of the folks living in the lower density area are there because they can't afford to live in the dense environment you seem to want to impose on people. Maybe they want nothing to do with your "high density" living - and aren't interested in wasting money on the hype.
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Old 08-08-2014, 01:52 PM
 
Location: Oakland, CA
27,165 posts, read 29,650,120 times
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Quote:
Originally Posted by IC_deLight View Post
No, because the same metric is being used when comparing houses on land. The point is that it is a useless metric for anyone but the truly brainless.

Land does have value so you resort to a different statistic to try to ignore it. The purchase price is what people are paying. Your "price per square foot" is a number that can be computed but it has poor representation of any market since it doesn't account for the land. The only time the metric become mathematically comparable is when the properties are nearly identical and the land component is the same such it can be crossed off both sides.

Your "metric" is as useless as generating price per square foot based solely on kitchen area or price per square foot based solely on garage size or price per chimney. It doesn't reflect what the purchaser is buying in any example.
This is a ridiculous argument on why you think price per square foot is useless. This metric covers livable space and is inclusive of other types of development that do not contain a meaningful unit of land (directly) i.e. a condo or townhome or loft.

It is actually a really useful metric to compare housing costs, since not all buyers want land. And cost per acre is really only meaningful if the amount of land far exceeds the livable space.
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Old 08-08-2014, 01:56 PM
 
5,076 posts, read 8,501,505 times
Reputation: 4632
Quote:
Originally Posted by IC_deLight View Post
No, because the same metric is being used when comparing houses on land. The point is that it is a useless metric for anyone but the truly brainless.

Land does have value so you resort to a different statistic to try to ignore it. The purchase price is what people are paying. Your "price per square foot" is a number that can be computed but it has poor representation of any market since it doesn't account for the land. The only time the metric become mathematically comparable is when the properties are nearly identical and the land component is the same such it can be crossed off both sides.

Your "metric" is as useless as generating price per square foot based solely on kitchen area or price per square foot based solely on garage size or price per chimney. It doesn't reflect what the purchaser is buying in any example.



I'm not impressed with your math skills given your price per square foot logical fallacy - and it is a fallacious argument.

Regarding King County or anywhere else, all I've seen you your say-so statistics in your attempts to marginalize anyone "not in the city" in your efforts to promote dense housing. Nonetheless, your conclusion doesn't hold in this example either. It sounds like your county didn't have jobs to support the economic demographic of the owners of the property on the outskirts - and it's not likely they moved to a more expensive place to live.

It's kind of difficult to get much more presumptious than your statement: "IE: the majority of people who can afford them would rather live somewhere else. In this case, that somewhere else is nearly always going to be much more dense and urban since you can't get much less dense and less urban than it is near the growth boundary."

You are starting from the absurd premise (and snob argument) that the majority of the folks living in the lower density area are there because they can't afford to live in the dense environment you seem to want to impose on people. Maybe they want nothing to do with your "high density" living - and aren't interested in wasting money on the hype.

LOL. Yes, it's all a big conspiracy where people are coerced into choosing the homes they don't want while the uber desirable ones sit unsold! You accuse me of being a marxist while failing to understand basic supply and demand as it's demonstrated in the market every day. Here's the short lesson: Low cost, low demand, high cost, high demand. Simple. You seem to have concocted some alternate universe where every law of market dynamics has been suspended to support your views.

Condos and town homes do come with land. It's under the building. If you look at the deeds, it's a % share of the lot.

You have a lot to say about nothing, but little explanation for the price differences besides "you measured wrong and are too dumb to know why" and "people who buy x are rubes". How is that not snobby?
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Old 08-08-2014, 02:13 PM
 
Location: Pittsburgh, PA (Morningside)
12,414 posts, read 11,913,851 times
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Quote:
Originally Posted by IC_deLight View Post
That assumes a "free market".
Local governments and various environmental groups are pushing for "dense development"
It gets built when there aren't alternatives and there are certainly urbanists actively working to try to prevent alternatives. Plus there are always the gullible types that buy into these places based on hype - and there's lots of hype about the "benefits" of these places.
It's true our housing market doesn't even come close to approaching a free market. But as I said, the thumbs on the scale in the favor of suburban (or at least large lot SFH) development have historically been quite strong. Adding some weight to the other side might establish a more healthy balance, but it doesn't free up the market. Eliminating zoning restrictions is the only thing which will do so.

It's worth noting that even in Houston, a relatively conservative city not known for forward-thinking urban policy people are clamoring for near-downtown condos, and the SFH market is flat. As the article notes, one contributing factor is that Houston has sprawled so much there is little room for new SFH within a reasonable commute to the CBD. But another is just what is desirable has changed.

Quote:
Originally Posted by IC_deLight View Post
Land does have value so you resort to a different statistic to try to ignore it. The purchase price is what people are paying. Your "price per square foot" is a number that can be computed but it has poor representation of any market since it doesn't account for the land. The only time the metric become mathematically comparable is when the properties are nearly identical and the land component is the same such it can be crossed off both sides.
Land has value, but it doesn't have inherent value, and actually profiting off the land is hard to realize. Zoning will generally restrict your ability, for example, to subdivide your yard in order to sell off (or build a rental structure), meaning you cannot make direct money off of it barring farming or mineral rights. The value gained by land, thus, is only when you sell it, and that is determined by the market.

It is pretty clear, furthermore, that to the extent people preferred large-lot single family homes in the past, they do not do so as much now. After all, the average house size for SFH continues to grow, but lot sizes even for greenfield development tend to shrink whenever local zoning doesn't preclude it. Developers clearly understand that while people are willing to pay a price premium for an extra bedroom or bathroom, they aren't willing to pay the same premium for space outdoors - or at least, that the premium is small enough it's more than canceled out by squeezing another few houses into the development.

I would say in my age cohort (I'm 35) most people do indeed want to own a detached single-family house with a front and backyard, and that I'm an outlier in that those aren't super important to me. But I don't think that most value a ton of space - that they'd rather buy a smaller house with a longer commute and an acre of property than the bigger one with a "postage stamp" yard nearby. There are of course some who do - most of them grew up in rural areas themselves. But this isn't the norm.
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Old 08-08-2014, 06:18 PM
Status: "Summer!" (set 15 days ago)
 
Location: Foot of the Rockies
86,987 posts, read 102,540,351 times
Reputation: 33045
Quote:
Originally Posted by mkarch View Post
LOL. Yes, it's all a big conspiracy where people are coerced into choosing the homes they don't want while the uber desirable ones sit unsold! You accuse me of being a marxist while failing to understand basic supply and demand as it's demonstrated in the market every day. Here's the short lesson: Low cost, low demand, high cost, high demand. Simple. You seem to have concocted some alternate universe where every law of market dynamics has been suspended to support your views.

Condos and town homes do come with land. It's under the building. If you look at the deeds, it's a % share of the lot.

You have a lot to say about nothing, but little explanation for the price differences besides "you measured wrong and are too dumb to know why" and "people who buy x are rubes". How is that not snobby?
Regarding the conspiracy-that's exactly what many urbanists have said about the suburbs. We were all coerced into buying there b/c the evil federal government made it more cost-effective to do so. That's nonsense, as well as thinking people are being coerced into the city. There are fads, of course. Believe it or not, it was faddish in the early 70s to live in "the city". It was a fad in our parents' generation to buy a new house in the burbs. But not everyone follows every fad.

Re: the bold; that's not true, generally about condos, and some townhouses are condo-style ownership and you don't own the land.

Quote:
Originally Posted by eschaton View Post
It's true our housing market doesn't even come close to approaching a free market. But as I said, the thumbs on the scale in the favor of suburban (or at least large lot SFH) development have historically been quite strong. Adding some weight to the other side might establish a more healthy balance, but it doesn't free up the market. Eliminating zoning restrictions is the only thing which will do so.

It's worth noting that even in Houston, a relatively conservative city not known for forward-thinking urban policy people are clamoring for near-downtown condos, and the SFH market is flat. As the article notes, one contributing factor is that Houston has sprawled so much there is little room for new SFH within a reasonable commute to the CBD. But another is just what is desirable has changed.



Land has value, but it doesn't have inherent value, and actually profiting off the land is hard to realize. Zoning will generally restrict your ability, for example, to subdivide your yard in order to sell off (or build a rental structure), meaning you cannot make direct money off of it barring farming or mineral rights. The value gained by land, thus, is only when you sell it, and that is determined by the market.

It is pretty clear, furthermore, that to the extent people preferred large-lot single family homes in the past, they do not do so as much now. After all, the average house size for SFH continues to grow, but lot sizes even for greenfield development tend to shrink whenever local zoning doesn't preclude it. Developers clearly understand that while people are willing to pay a price premium for an extra bedroom or bathroom, they aren't willing to pay the same premium for space outdoors - or at least, that the premium is small enough it's more than canceled out by squeezing another few houses into the development.

I would say in my age cohort (I'm 35) most people do indeed want to own a detached single-family house with a front and backyard, and that I'm an outlier in that those aren't super important to me. But I don't think that most value a ton of space - that they'd rather buy a smaller house with a longer commute and an acre of property than the bigger one with a "postage stamp" yard nearby. There are of course some who do - most of them grew up in rural areas themselves. But this isn't the norm.
Your eastern bias (for lack of a better word) is showing. Out west, we don't have large lots, and even the older immediate post-war homes have lots under 1/4 acre for the most part.
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Old 08-08-2014, 07:54 PM
 
5,076 posts, read 8,501,505 times
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Originally Posted by Katiana View Post
Regarding the conspiracy-that's exactly what many urbanists have said about the suburbs. We were all coerced into buying there b/c the evil federal government made it more cost-effective to do so. That's nonsense, as well as thinking people are being coerced into the city. There are fads, of course. Believe it or not, it was faddish in the early 70s to live in "the city". It was a fad in our parents' generation to buy a new house in the burbs. But not everyone follows every fad.

Re: the bold; that's not true, generally about condos, and some townhouses are condo-style ownership and you don't own the land.
It depends. There are a bunch of different ways the land ownership is controlled. I've even seen a growing number of suburban SFH developments where the land is held separately from the homes, so they're more like free standing condos. However in Seattle proper the standard is to assign a piece of land to each unit, 1/100th interest in the base parcel, etc... Town homes generally have their own tax parcel even if they're completely attached.

As for coercion, I think the standard (realistic) argument is the federal government encouraged suburban development at the expense of urban development. Look at what was going on at the time - large European (and Japanese!) cities reduced to rubble and the cold war nuclear threat. Being spread out has some advantages in that context. Not necessarily that it was coercive. There was some history of "block busting" during the suburban migration, and while the supreme court ruling that disallowed racial covenants is what make that possible, it doesn't seem that that was the intent. However it the ruling did provide a tool for nefarious agents and developers to "chase" people out of certain neighborhoods.

As far as it being a fad, I'd say there's some truth to it along with some practical factors. A lot of the old in city neighborhoods fell out of favor due to failing schools, crime, pollution, urban disinvestment and decrepit infrastructure. Once those factors began to turn the other direction and suburbs became too big to be accessible there are many reasons to move back in to the close in neighborhoods.

Personally, I've lived in both, and eventually decided to buy a SFH on the far edge of an area undergoing rapid gentrification and increase in density. Granted it's in an pocket that is 100% SFH zoned with little chance or potential for high density development within at least a 1/2 mile, so I see the attraction of that over being right in the 'up zoned' portion. We looked another mile or two north, but decided those neighborhoods, while nice (and having some fantastic views) were not urban enough. And we're not alone. If you compare the birth rates in our area, it's actually in line with or slightly higher than the suburbs generally regarded as 'family friendly'.
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