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I think most people would agree that the new quickly built houses of today aren't built as well as the houses back in the good ol' days. So why are houses still so expensive despite cheaper materials, cheap labor, and plentiful land? Is it due to cheap credit being offered by the bank/govt? I feel sorry for the younger generations who are graduating with huge student loans and getting mediocre starting salaries. Imagine what will happen after the $1 trillion+ student loan bubble pops.
Here's some data in regards to housing prices and median US income:
1970
Median U.S. home price: $17,000
Median household income: $9,300
2009
Median U.S. home price: $178,600
Median household income: $50,200
The US Census Bureau actually has a chart with Median and Average Square Feet of Floor Area in New Single-Family Houses Completed by Location (that's the actual name of the chart). It also has regional stats.
The statistics run from 1973 through 2010.
Year: US Median SF US Average SF
1973 1525 1660
2010 2169 2392
% change 30% 29.6%
EDIT: Sorry, can't do anything with the formatting but hopefully folks can read it.
The US Census Bureau actually has a chart with Median and Average Square Feet of Floor Area in New Single-Family Houses Completed by Location (that's the actual name of the chart). It also has regional stats.
The statistics run from 1973 through 2010.
Year: US Median SF US Average SF
1973 1525 1660
2010 2169 2392
% change 30% 29.6%
EDIT: Sorry, can't do anything with the formatting but hopefully folks can read it.
Right - the only way to get a really clear picture is to compare the price (with an inflation calculator) with homes of the same square footage and similar construction - laminate counter tops, low ceilings, and all the other "joys" of a 1970s built home - tiny bathrooms, usually no master bath, itty bitty closets, a one car garage, and often poor cabinetry work and construction (I agree with Rakin - the 1970s were TERRIBLE when it came to home construction - one of the very worst eras in fact).
I can only speak for my own area, but adjusted for inflation, $17,000 in 1970 equates to about $103,000 today. In this area, you can still buy a 1600 square foot house with tiny closets and bathrooms and laminate countertops and low ceilings and a one car garage for, well, about $103,000.
Houses are bigger. Everything is more expensive. People make too much money. There are far more people today than even in the 70s. Simple supply and demand means that the more people we have, the higher prices will generally be. It's just too bad that Zero Population Growth never caught on.
The most expensive houses are on the coasts and particularly in the major urban areas.
It simply has to do with supply and demand. The supply of housing has decreased relative to the population growth, putting upward pressure on housing prices. Most of the coastal cities added stringent zoning and development control to preserve open spaces, which in turn made it difficult to build more houses to keep up with the population growth. There's a correlation between the introduction of land preservation controls and the upswing in housing prices, which explains why some areas have become much more expensive (Boston, New York, San Francisco, Los Angeles) than others where land is seemingly unlimited (Phoenix, Houston, Dallas).
Because land outside the major cities became more expensive, pressure was placed on the developers to maximize the potential of land, which they did by building bigger houses serving a higher income clientele.
It is called supply and demand. In 1970 the US population was 203,392,031. In 2010 it was 308,745,538. For those of you crybabies that want to know why everything is turning to crap, ask the extra 100 million+ people that are part of the equation.
It's not just population growth, it's also changing demographics. There are far more singles and childless couples today who are buying houses, compared to the 1970s when the nuclear family made up the majority of the population.
Quote:
Originally Posted by AZJoeD
It is called supply and demand. In 1970 the US population was 203,392,031. In 2010 it was 308,745,538. For those of you crybabies that want to know why everything is turning to crap, ask the extra 100 million+ people that are part of the equation.
'Expensive' is a relevant term. Yes, houses today are significantly more expensive than they were in 1970 ... but, what isn't? I remember thinking in about 1970 that anyone who could make $10,000-$15,000 per year pretty much had it made! -- I also remember buying a very nice, tri-level 3/2 home in a good area for about $16,000 ... and a great new little sports car for about $4000! Of course, one didn't need a small car then, since gas prices (during the 1968-1974 'gas wars') were around 25-cents per gallon.
To really put things in perspective, I've got one of those replica 1908 Sears & Roebuck catalogs --- filled with hundreds of things one used to be able to buy for 'pennies on today's dollar!'
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There are far more people today than even in the 70s. Simple supply and demand means that the more people we have, the higher prices will generally be. It's just too bad that Zero Population Growth never caught on.
