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That depends, like most things in real estate, on location.
I don't want to get into a discussion on this, but by your own statement, it is the land (location) that appreciates. A building is a durable good, and all durable goods depreciate over time.
I remember drilling a well for one new home.........it was big and really nice.
Likely $500,000 or, more.
As I talked to the people I thought they owned a restaurant......nope.......he is a prep-cook.....she does home healthcare.
Three years last I see the home in foreclosure.
That's crazy!!! How did they even get approved for a loan that big?? If they both made a combined 55k year they could have got maybe 150k plus whatever downpayment they could afford. That's not considering other debts they may have. To get 500k, you need to make well over 100k IMO.
Quote:
Originally Posted by dman72
In most of the country, huge houses (by traditional standards) are all that are being built, even with high energy prices, which I don't understand. You have these huge entrance ways, which look nice, but you're heating and air conditioning a huge volume of space. It makes no sense for most people.
Ikr, and it just makes me scratch my head. Where are starter families (1-3 people) supposed to live? I'm single, am I supposed to live in an expensive apartment forever? I just don't see how there's not a market for much smaller but nice 100-200k homes. I don't even want a house that size if I could afford it.
In this, my second career, I broker real estate. It's a service business with fiduciary responsibility to my clients.
Seems to me that real estate has trended bigger for 50 years, right along with suburbia. Somewhere along the way, the middle class seemed to decide each kid needed his own room and more than one bath was a necessity. A living room was not good enough. There had to also be a family room and a finished basement. And all this occurred while family sizes were getting smaller, decades before HGTV.
Usually the buyer feels like they spent too much and the seller feels like they gave it away.
The whole process for both the buyer and seller trends super emotional.
US people tend to live larger than just about anywhere else in the world.
There's a local agent who is an occasional " agent" on one of the HGTV shows. By the time the show is filmed, the couple has already seen dozens of homes and chosen the one they think is best. The rest is staged.
I tend to work one zip code, a 100 square mile area. About 40% of homes are Mc Mansions. They have been hit the hardest since the bubble burst and many times are outstanding values if one wants size. It is common to see small families " needing" 1000+ of square feet of space per occupant and some of them do.
Conversely, I have seen families "crush" on relatively small spaces that offer very open floor plans and all the bells and whistles and not realize how they will actually live in such space, till I question them.
My sense is that HGTV has more to do with promoting their sponsor's products and do so by incorporating them into the story line. Decorating sells usually for more and quicker than a blank slate. So many cannot visualize empty space. Forgetabout cluttered space.
I grew up in a family of 4 who lived in apartments of 750 sq feet or less. I knew families with 12-17 kids who had one bath and wall to wall bunk beds in tiny bedrooms. This was typical middle class at one point in time.
I'm just pointing out that as an investment, the land appreciates, but the building does not. All other things being equal, putting money into more acreage is wiser than putting it into more square footage of home.
I think a lot of people still believe that the value of their home will increase above the rate of inflation. Many experts say it is not true, many say housing is still a pretty good investment.
I think investment might be the reason why people buy houses they cannot afford or don't need. Owning a house to a lot of people is a symbol of accomplishment.
And they do, despite long history to the contrary in most of the US.
We remodeled an old farm house.......it is worth a lot more now.
OK that's what people need to keep in mind.
When you factor in inflation plus what you spend to keep the building up to date, it's hard to make even a marginal profit off buildings.
The profit comes from people who flip by coming in and buying a property cheap, getting lucky on hidden damage, finding cheap but relatively nice solutions, and doing as much work as possible themselves. Even then profits of more than 30 grand are rare.
That's crazy!!! How did they even get approved for a loan that big?? If they both made a combined 55k year they could have got maybe 150k plus whatever downpayment they could afford. That's not considering other debts they may have. To get 500k, you need to make well over 100k IMO.
Ikr, and it just makes me scratch my head. Where are starter families (1-3 people) supposed to live? I'm single, am I supposed to live in an expensive apartment forever? I just don't see how there's not a market for much smaller but nice 100-200k homes. I don't even want a house that size if I could afford it.
I did not ask them much.......but, I do know they had a separate loan to make a down payment.......and they were told they could just refinance in five years.
This thread is a tad confused.
Are American's brainwashed into buying homes they don't need?
More than likely not, unless they're trying to keep up with the Jones, use them as an ATM constantly refinancing and never letting principle accrue, or have no fiscal plan. Are American's living above their means?
Again, more than likely not. Our standard of living is high, so what defines living above their means? I'd guess that the majority of people buy what they need, and splurge on occasion.
It's all about managing money. Now, if you ask do people mismanage their money, that would be a resounding yes. For me, when I hear that people with 50K+ incomes have a hard time paying their bills, I have to laugh. On the other hand, I think there are a vast majority of people who live on far less, yet manage to pay all their bills on time, and enjoy a decent lifestyle, like we do.
When I went from a high cash flow high stress job, and forced into a lower income business I thought it was going to be hell. It was actually an aha moment as I retrained myself to manage money far better.
The next time I have disposable income, I'll be much wiser with it.
In this, my second career, I broker real estate. It's a service business with fiduciary responsibility to my clients.
Seems to me that real estate has trended bigger for 50 years, right along with suburbia. Somewhere along the way, the middle class seemed to decide each kid needed his own room and more than one bath was a necessity. A living room was not good enough. There had to also be a family room and a finished basement. And all this occurred while family sizes were getting smaller, decades before HGTV.
Usually the buyer feels like they spent too much and the seller feels like they gave it away.
The whole process for both the buyer and seller trends super emotional.
US people tend to live larger than just about anywhere else in the world.
There's a local agent who is an occasional " agent" on one of the HGTV shows. By the time the show is filmed, the couple has already seen dozens of homes and chosen the one they think is best. The rest is staged.
I tend to work one zip code, a 100 square mile area. About 40% of homes are Mc Mansions. They have been hit the hardest since the bubble burst and many times are outstanding values if one wants size. It is common to see small families " needing" 1000+ of square feet of space per occupant and some of them do.
Conversely, I have seen families "crush" on relatively small spaces that offer very open floor plans and all the bells and whistles and not realize how they will actually live in such space, till I question them.
My sense is that HGTV has more to do with promoting their sponsor's products and do so by incorporating them into the story line. Decorating sells usually for more and quicker than a blank slate. So many cannot visualize empty space. Forgetabout cluttered space.
I grew up in a family of 4 who lived in apartments of 750 sq feet or less. I knew families with 12-17 kids who had one bath and wall to wall bunk beds in tiny bedrooms. This was typical middle class at one point in time.
It goes without saying that most of that TV is staged.
I'm just tired of big, big, big being pushed on us.
Now I don't want us living like Mexicans with 20 to a 1000 sq ft house, but what's wrong with say 4 to a 1600 sq ft house? Or 2-3 to a 1000-1200 sq ft house? Seems like a better use of land too as you can squeeze houses closer without being cramped.
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