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The housing market needs more condos

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Re: The housing market needs more condos

#101

Post by trinovantes »

Victerius wrote: post #13
twalla wrote: post #5

A lot of people have a big chunk of their net worth tied up into home equity because it's sort of the "ordained" path to building wealth for the middle class - condos don't see similar appreciation, get hit harder in downturns and are one of the last types of properties to recover in value afterwards. Start incentivizing treating housing as, you know, a place to live rather than a financial instrument and you'll see…

> condos don't see similar appreciation, get hit harder in downturns and are one of the last types of properties to recover in value afterwards. This is fine. I don't buy a condo with the hope of recouping my money. I buy a condo to have a roof over my head. I couldn't care less if my condo loses 80% of its value. It would lower my property tax bill in fact. I don't expect a ROI > 0 for the furniture either. For my r…

Property tax is based on the municipality's budget. If your assessed value goes down, your property tax rate would go up while your final bill would remain relatively the same.

Re: The housing market needs more condos

#103

Post by seanmcdirmid »

twalla wrote: post #5

A lot of people have a big chunk of their net worth tied up into home equity because it's sort of the "ordained" path to building wealth for the middle class - condos don't see similar appreciation, get hit harder in downturns and are one of the last types of properties to recover in value afterwards. Start incentivizing treating housing as, you know, a place to live rather than a financial instrument and you'll see…

> Start incentivizing treating housing as, you know, a place to live rather than a financial instrument and you'll see plenty more condos.

This happens in Japan, but happens mainly as a result of:

a. No one sees real estate as a sure shot after the excess of the 80s.

b. Declining population means even Tokyo has a lot of extra housing.

c. It is easy to rebuild housing, so people rarely buy "used" homes, leaving on the land as a real estate vehicle for appreciation (the structure is overhead). Condos are almost worthless speculative assets in that sense.

Re: The housing market needs more condos

#104

Post by seanmcdirmid »

ab_testing wrote: post #97
pivo wrote: post #54

Earlier quoted context omitted.

> condos don't see similar appreciation It depends on where the condo is. My condo in Boston has increased in value 2.5 times in the 20 years I've owned it. My friend's home in a wealthy suburb of Boston increased by 40% in almost the same amount of time. That's taking into account the last two years of the pandemic where we saw housing price increases slow or stop in the city while suburban prices rose much more qui…

I think this comment just proved that condos don't appreciate as fast as single family homes or townhomes. In certain cities in the US, single family homes have gone up 2.5x in the last 5 years & sometimes even less than that. Phoenix, Las Vegas, Miami, Mountain View are some examples

If you looked at appreciation over 20 years in those cities (sans Mountain View), it might come out to less than 2.5X even if the last 5 years it was, especially when inflation is accounted for. Phoenix in particular:

https://i0.wp.com/arizonarealestatenotebook.com/wp-content/u...

This graph only goes up to 2019, so it is probably higher now, but that is one heck of a drop.

Also, it isn't strange that a lower cost market appreciates faster than a higher price one. If say houses were $100k in Phoenix after the crash in 2008, now they are $400k, that is 4X! At the same time, a $1 million dollar house in Boston after the crash is only $1.4 or 1.5 million now, only 1.5X.

Re: The housing market needs more condos

#105

Post by mushbino »

seanmcdirmid wrote: post #103
twalla wrote: post #5

A lot of people have a big chunk of their net worth tied up into home equity because it's sort of the "ordained" path to building wealth for the middle class - condos don't see similar appreciation, get hit harder in downturns and are one of the last types of properties to recover in value afterwards. Start incentivizing treating housing as, you know, a place to live rather than a financial instrument and you'll see…

> Start incentivizing treating housing as, you know, a place to live rather than a financial instrument and you'll see plenty more condos. This happens in Japan, but happens mainly as a result of: a. No one sees real estate as a sure shot after the excess of the 80s. b. Declining population means even Tokyo has a lot of extra housing. c. It is easy to rebuild housing, so people rarely buy "used" homes, leaving on the…

It's also the case in China where 73% of millennials are homeowners.

Re: The housing market needs more condos

#106

Post by brewdad »

AJ007 wrote: post #58
notatoad wrote: post #37

Earlier quoted context omitted.

>It's less risky. depending on your local housing market, it could be much more risky. where i live, for the last few years renting has carried the real possibility of being unable to find a place to live, for any amount of money, when your lease ends. the big upside to a condo is that nobody is going to kick you out.

The building could collapse, be condemned, there could be any number of natural disasters. You can end up in a situation where you owe a lot of money on the mortgage, interest rates move up, and the value drops, so now you can’t move. If something major fails with the building, a repair bill could be so large that you have to take out another mortgage to pay for it, no matter your current financial situation. Plenty…

SFHs burn down, are destroyed by floods or landslides. Termites may lead to hidden damage that leads to thousands of dollars in repair bills. On and on... All of the risks you list for condo owners exist for homeowners as well. A diligent homeowner may have more control over preventing/limiting some issues but sometimes stuff happens. As far as I know it is impossible to insure against every threat to ones home (landslides for instance) at any price.

Re: The housing market needs more condos

#107

Post by seanmcdirmid »

mushbino wrote: post #105
seanmcdirmid wrote: post #103

Earlier quoted context omitted.

> Start incentivizing treating housing as, you know, a place to live rather than a financial instrument and you'll see plenty more condos. This happens in Japan, but happens mainly as a result of: a. No one sees real estate as a sure shot after the excess of the 80s. b. Declining population means even Tokyo has a lot of extra housing. c. It is easy to rebuild housing, so people rarely buy "used" homes, leaving on the…

It's also the case in China where 73% of millennials are homeowners.

Considering china is still very rural that doesn’t seem surprising. But China is still in their 1980s Japan phase where real estate in Shanghai is worth more than all of California.

Re: The housing market needs more condos

#108

Post by brewdad »

dec0dedab0de wrote: post #81
tdeck wrote: post #72

Earlier quoted context omitted.

If you look closely when walking around a neighborhood of row houses you'll find that they don't actually share side walls. Each row house has its own exterior walls with siding / exterior finish that may end up directly adjacent to the next house's exterior wall. This is apparent in areas where one row house has been torn down or is larger than its neighbor. Of course sound and fire might travel through these more e…

I would call those townhouses, it's probably just a regional thing. The row houses I'm thinking about are in Philadelphia, and I think most other east coast cities. Occasionally you'll see one with the neighboring house(es) demolished, and there are usually remaining bricks from the missing house on the now exterior wall.

Has anyone built a new rowhouse, like those in Philly, since the end of WWII? Serious question. I don't think they are allowed anywhere in the US anymore. Existing ones are grandfathered in.

Re: The housing market needs more condos

#110

Post by refurb »

Gigachad wrote: post #98
sidlls wrote: post #73

Earlier quoted context omitted.

Almost nobody, having had the pleasure of living in even a modest SFH, would prefer to be packed in like sardines the way modern high-rise buildings do. It's possible to make high density housing that doesn't feel like that, but it's not as profitable so developers don't. That's why the vast majority of high-rise condos are one and two bedroom shoeboxes instead of spacious three (or more) bedroom homes. We won't get…

Had lived only in single family houses up until I moved to an apartment in the middle of the city and wow, the quality of life bump was astounding. Being able to just walk to anything you need, not owning a car, having so many high end places to eat at and entertainment venues to visit, the huge security benefit of being above ground level, being at the centre of public transport so friends can visit easily. So many…

It’s even better having a single family home in the city. You get all that plus space.
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