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A Growing Problem in Real Estate: Too Many Too Big Houses

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Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#131

Post by [deleted] »

camelNotation wrote: post #79
Blackstone4 wrote: post #4

We have a similar issue in the UK since there are large houses being occupied by older couples whose children have left. Since annual property taxes are low (~4k - we call it council tax) and tax on buying property (stamp duty) is high, there is no incentive to move to a smaller place.

What about the headache of maintaining a big home? I've seen what it is like to care for a large home. It's a nightmare, whether you have money or not. Every pool, every gymnasium, every commercial-grade appliance, etc. They all require maintenance, repair, and eventual replacement. To do that, it costs a lot more and the available labor is much more limited. You have to wait weeks for some guy who lives two states a…

[deleted]

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#132

Post by dfischer »

Insight into younger generations:

I hate the idea of owning property. I don't want to be stuck to a city or a location. The world, and the universe have so much to offer. To me, buying a house is cementing your location and stunting the amount of knowledge you can acquire by handcuffing you to a location and limiting your exposure to the world.

That is the philosophical side, then there's the debt and the overall asset appreciation game that everyone else plays.

I have no interest in owning a home to settle down. If I do it, it would be to exploit financial interests with the right opportunity. I think we can use a radically different model for housing and what we consider livable spaces for our species.

I'd love to see cities built around the Dunbar number and with transportation making travel times easier, we can see some interesting designs. Foster community and allow communication and personal reach across distances. This is probably going to be forced by warehouse space in relation to live space. We're going to need more and more land for manufacturing and storage of goods compared to retail and shopping experiences. We'll have living communities without much need to venture into markets. Markets will be VR, and many jobs will be remote. Foster community with "villages" within a city that is related to the Dunbar number.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#133

Post by JKCalhoun »

Balgair wrote: post #104
maxsilver wrote: post #98

Earlier quoted context omitted.

I also hate maintaining a detached single family home with a yard. I also hate being responsible for the fixes. But that situation is still far better than renting. When we rented, we were subjected to eviction at any time, for nearly any reason, for basically no notice (60 days, which in the US is effectively zero notice). Your subjected to every whim the crazy wildly-irrational housing market throws at you (we've h…

> we've had 12% yearly rental increases for a decade straight now, despite living in bumblefudge-nowhere Midwest Quick math for the rest of you out there: That means they paid 1000 in 2009 and now pay ~3500 in 2019. Also, yes, I feel you there. Our rental agreement states a mandatory 10% increase if you rent from year to year. I've no idea why the company is this stupid though. The rents around us are falling or stay…

> I'm sure there is some tax thing involved here

Loyalty tax, perhaps. They expect people to just "take it".

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#134

Post by pdpi »

pjc50 wrote: post #5

This is not only "first world problems", but 1% first world problems. Well, maybe 5%: given > For their retirement in a suburb of Asheville, N.C., Ben and Valentina Bethell spent about $3.5 million in 2009 to build their dream home: a roughly 7,500-square-foot, European-style house with a commanding view of the Blue Ridge Mountains. Put $3.5m into https://dqydj.com/net-worth-percentile-calculator-united-sta... and yo…

For the families in the story, the problem is they can't get rid of homes that are uncomfortably big. Definitely a 1%-ish problem (hell, a .1% problem. I would have plenty of use for more space but I simply can't afford it in London).

However, there's another problem here, one for the rest of us — The site used for a single-family 700sqm home could've been used for something denser, that would've lowered housing costs for everybody else.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#135

Post by benj111 »

Balgair wrote: post #104
maxsilver wrote: post #98

Earlier quoted context omitted.

I also hate maintaining a detached single family home with a yard. I also hate being responsible for the fixes. But that situation is still far better than renting. When we rented, we were subjected to eviction at any time, for nearly any reason, for basically no notice (60 days, which in the US is effectively zero notice). Your subjected to every whim the crazy wildly-irrational housing market throws at you (we've h…

> we've had 12% yearly rental increases for a decade straight now, despite living in bumblefudge-nowhere Midwest Quick math for the rest of you out there: That means they paid 1000 in 2009 and now pay ~3500 in 2019. Also, yes, I feel you there. Our rental agreement states a mandatory 10% increase if you rent from year to year. I've no idea why the company is this stupid though. The rents around us are falling or stay…

"Our rental agreement states a mandatory 10% increase if you rent from year to year"

Why even sign that agreement? That landlord obviously isn't going to give a toss if there's a issue. Its just a huge red flag for me.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#136

Post by lotsofpulp »

dfischer wrote: post #132

Insight into younger generations: I hate the idea of owning property. I don't want to be stuck to a city or a location. The world, and the universe have so much to offer. To me, buying a house is cementing your location and stunting the amount of knowledge you can acquire by handcuffing you to a location and limiting your exposure to the world. That is the philosophical side, then there's the debt and the overall ass…

Most people have the same thoughts (at least in the income class that can afford to move around), until they have children and need a good school district.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#137

Post by jawns »

chrisBob wrote: post #115

I built a house last year, and had to work with a few different banks to finally get a construction loan. One of the fist ones said to me "1900 sq-ft? You shouldn't be building a house that small". We made it work, but would have gone with a manufactured home before we would have built something with 3k+ square feet just to make the bank happy.

I would assume the first bank advised against it, and the other banks passed on it, is because they need to think not only about whether you can be expected to repay the loan, but also about how easy it is going to be to offload the property if you can't afford the loan and they need to foreclose.

Yes, YOU might be perfectly happy in a 1,900 square foot home, but if the market demand is for houses significantly larger, then you, or the bank, might find it (relatively) hard to find a buyer if you ever need to sell.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#138

Post by KevinSorboFan »

simonh wrote: post #61
pjc50 wrote: post #57

Earlier quoted context omitted.

> If a couple make a loss of $1m selling a house, then they may need to liquidate $1m of savings to cover the loss This doesn't make sense? Firstly, the point at which the capital was withdrawn from savings was the time the house was built - savings turned into a physical capital asset. That house has lost value, but that doesn't affect liquidity. Secondly, there's a global capital glut to start with - that's why int…

The couple sells the house and then wants to do something else with the money they get back. Maybe they buy another house or give money to their children or both. They still want to do those things, but they have $1m less from selling the property than they expected, so they liquidate $1m in savings which they wouldn't have otherwise needed to do. Alternatively they spend $1m less, or invest $1m less, which is $1m le…

You can flip this argument around for the person buying the house, though, so it doesn't really work. What if the house didn't sell for $1m less? Then those new buyers just lost an extra $1m that they otherwise could have invested elsewhere in the economy. Or conversely, when the house sells for $1m less, you're freeing them up from that additional burden and they can put their next $1m into investments besides the house.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#139

Post by newsoul2019 »

hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

Am I the only one who has always seen renting as a temporary arrangement only? If you don't own something, somewhere, doesn't that mean the same as being homeless? Not trying to offend anyone. Genuinely wondering, are there people who really don't want to own real estate ever in their lives?

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#140

Post by dfischer »

lotsofpulp wrote: post #136
dfischer wrote: post #132

Insight into younger generations: I hate the idea of owning property. I don't want to be stuck to a city or a location. The world, and the universe have so much to offer. To me, buying a house is cementing your location and stunting the amount of knowledge you can acquire by handcuffing you to a location and limiting your exposure to the world. That is the philosophical side, then there's the debt and the overall ass…

Most people have the same thoughts (at least in the income class that can afford to move around), until they have children and need a good school district.

School today is an archaic design. Education has no bounds with the internet and the spread of information where it is no longer asymmetric. School and universities are falling out of favor. What matters is what skills you have over what degree. The internet and the corpus of knowledge equalizes this. This assumes connectivity is a given – I believe connectivity will be tablestakes in a variety of situations and incentives by those that can provide it.

Additionally again, education outside of pure learning like we're limited today on the internet will be more immersive with VR/AR and your need to go to a physical location will differ.

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