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So, we built a house for $34k in 1972. We sold for 139k. The current Zillow is $179k. I don't know if any of the owners paid it off, but that is just how it goes.
I kind of wish we'd just stayed there, paid it off and now we'd be a lot richer. We didn't know the bubble would ever burst. Back then, we were "sure" that real estate values always went up and so did salaries.
So, we built a house for $34k in 1972. We sold for 139k. The current Zillow is $179k. I don't know if any of the owners paid it off, but that is just how it goes.
I kind of wish we'd just stayed there, paid it off and now we'd be a lot richer. We didn't know the bubble would ever burst. Back then, we were "sure" that real estate values always went up and so did salaries.
Everyone has come up with somewhat complicated economic arguments, which are by and large valid, but they forget:
The reason we have mortgages when the house we grew up in is perfectly fine is that we don't want to live with our parents all our lives, and most of our parents had at least two kids, if not more, making said home overcrowded.
Around the the rest of the country, a McMansion is usually referring to mass-produced, poor quality, larger homes - say, 4,000 sf homes on 1/5 of an acre, where all the units are minor variations on the same floor plan and all by the same developer.
In the Bay Area, that definition doesn't work well, because few homes are mass-produced anymore because there are few buildable tracts of 20 acres where mass-production makes sense. Instead, in most of the Bay Area, you get "in-fill" of small buildable lots (say 2 to 4 units) or individual tear-downs with custom home replacements. The latter are not mass-produced, as they are one-at-a-time builds.
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.
Fixers would just rot. What incentive would there ever be to invest in real estate if you can only 2000 dollars when you resell?
I couldn't read through this whole thread. Did the first few and last few. There's just such a silliness to the whole idea. The idea that if someone pays off a house they then just give it to someone else that never sells it and someone from that family lives there forever. There's a million reasons why this doesn't happen that everyone except for the OP is clear on.
I can't help but think of something like, Mom an Dad have 3 kids and own their house free and clear. Mom and Dad die, do all three kids live in the free house or to two of them let the other have the free house and then go buy their own? No, when this happens that house us usually sold and value divided 3 ways.
I couldn't read through this whole thread. Did the first few and last few. There's just such a silliness to the whole idea. The idea that if someone pays off a house they then just give it to someone else that never sells it and someone from that family lives there forever. There's a million reasons why this doesn't happen that everyone except for the OP is clear on.
I can't help but think of something like, Mom an Dad have 3 kids and own their house free and clear. Mom and Dad die, do all three kids live in the free house or to two of them let the other have the free house and then go buy their own? No, when this happens that house us usually sold and value divided 3 ways.
I understand that perfectly well. People having multiple kids goes under "population growth" (see post #1). I can't believe how many of you mention the issue of splitting among multiple kids as though I hadn't already mentioned/acknowledged it...geesh.
I understand that perfectly well. People having multiple kids goes under "population growth" (see post #1). I can't believe how many of you mention the issue of splitting among multiple kids as though I hadn't already mentioned/acknowledged it...geesh.
Well we don't know what point you are trying to make.
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