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The Costs of Homeownership Are Skyrocketing

wsj.com

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Re: The Costs of Homeownership Are Skyrocketing

#11

Post by dmarchand90 »

JohnTHaller wrote: post #7

From 2000 to 2022 in the US adjusted for inflation: The US median income has gone up about 10.5% The average cost per sq foot of new single family home has gone up about 40% The average sale price of a home has gone up about 60% The median sale price of a house has gone up about 70% https://www.statista.com/statistics/682549/average-price-per... https://fred.stlouisfed.org/series/ASPUS https://fred.stlouisfed.org/ser…

The crazy thing is the US is probably one of the most affordable places in the developed world even now!

Re: The Costs of Homeownership Are Skyrocketing

#12

Post by throwaway2016a »

xnx wrote: post #5

Has the inflation adjusted percent of income spent on all housing costs per square foot of space per occupant changed appreciably over time? I see too many articles that don't even attempt to control for the most obvious of factors.

I hear this all the time but it doesn't make much sense, IMO. Buyers do not control the square footage of inventory and for the most part are not looking for a huge house.

"The house I just bought is 4k square feet because I demanded a huge house" is very different than "The house is 4k square feet because it was one of only 3 houses put on the market this month and it was either this or no house at all."

So, while yes, it is probably true that a lot of houses on the market are probably generally larger, I'm not sure that matters for this debate unless the buyers are actually demanding that (which in my experience, they are not).

"But your houses is bigger" is no consolation when you didn't want a big house to begin with. It's a signal what the builders are building and zoning laws allow is completely out of touch with what people actually want. Yes, demand drives up cost but the demand is there because people want housing and the only houses available are huge not because they are looking for huge houses.

Re: The Costs of Homeownership Are Skyrocketing

#13

Post by bennyhill »

throwaway2016a wrote: post #12
xnx wrote: post #5

Has the inflation adjusted percent of income spent on all housing costs per square foot of space per occupant changed appreciably over time? I see too many articles that don't even attempt to control for the most obvious of factors.

I hear this all the time but it doesn't make much sense, IMO. Buyers do not control the square footage of inventory and for the most part are not looking for a huge house. "The house I just bought is 4k square feet because I demanded a huge house" is very different than "The house is 4k square feet because it was one of only 3 houses put on the market this month and it was either this or no house at all." So, while y…

Its also not buyer and future occupants that determine (new) house sizes. Local government in many places uses zoning to make sure new dwelings bring more tax income than school age children costs.

Re: The Costs of Homeownership Are Skyrocketing

#14

Post by throwaway2016a »

bennyhill wrote: post #13
throwaway2016a wrote: post #12

Earlier quoted context omitted.

I hear this all the time but it doesn't make much sense, IMO. Buyers do not control the square footage of inventory and for the most part are not looking for a huge house. "The house I just bought is 4k square feet because I demanded a huge house" is very different than "The house is 4k square feet because it was one of only 3 houses put on the market this month and it was either this or no house at all." So, while y…

Its also not buyer and future occupants that determine (new) house sizes. Local government in many places uses zoning to make sure new dwelings bring more tax income than school age children costs.

Yes, absolutely. I did mention zoning in my message, which definitely plays a big role. Not just property tax related but also a lot of existing property don't want high density housing in their back yard.

Re: The Costs of Homeownership Are Skyrocketing

#15

Post by xnx »

throwaway2016a wrote: post #12
xnx wrote: post #5

Has the inflation adjusted percent of income spent on all housing costs per square foot of space per occupant changed appreciably over time? I see too many articles that don't even attempt to control for the most obvious of factors.

I hear this all the time but it doesn't make much sense, IMO. Buyers do not control the square footage of inventory and for the most part are not looking for a huge house. "The house I just bought is 4k square feet because I demanded a huge house" is very different than "The house is 4k square feet because it was one of only 3 houses put on the market this month and it was either this or no house at all." So, while y…

> Buyers do not control the square footage of inventory and for the most part are not looking for a huge house.

Collectively, over time, buyers' preferences are manifested in the housing stock. Same as with cars getting bigger.

Re: The Costs of Homeownership Are Skyrocketing

#16

Post by throwaway2016a »

xnx wrote: post #15
throwaway2016a wrote: post #12

Earlier quoted context omitted.

I hear this all the time but it doesn't make much sense, IMO. Buyers do not control the square footage of inventory and for the most part are not looking for a huge house. "The house I just bought is 4k square feet because I demanded a huge house" is very different than "The house is 4k square feet because it was one of only 3 houses put on the market this month and it was either this or no house at all." So, while y…

> Buyers do not control the square footage of inventory and for the most part are not looking for a huge house. Collectively, over time, buyers' preferences are manifested in the housing stock. Same as with cars getting bigger.

I know in theory that is how it should work but is there a study to back that up?

The thing is, in my estimation, in most places the demand is so high that whatever makes the builders the most is what will get made. Which isn't necessarily what the majority of the market demands. Builders profit more off high square footage and buyers -- desperate for just someplace to live that's not the rental market -- will snatch it up. A 4 bedroom house in my market (granted one of the hottest housing markets in the US) is usually gone just days after listing.

Or, to use an analogy, if you open a water stand in the desert and sell flavored water for $5, it doesn't matter if the buyer really wanted plain water for $1, they are still going to buy your water since it is the only water available. And why start offering plain water when the flavored one sells out instantly and makes more profit?

Re: The Costs of Homeownership Are Skyrocketing

#17

Post by Fire-Dragon-DoL »

JohnTHaller wrote: post #7

From 2000 to 2022 in the US adjusted for inflation: The US median income has gone up about 10.5% The average cost per sq foot of new single family home has gone up about 40% The average sale price of a home has gone up about 60% The median sale price of a house has gone up about 70% https://www.statista.com/statistics/682549/average-price-per... https://fred.stlouisfed.org/series/ASPUS https://fred.stlouisfed.org/ser…

What about condos?

I know US don't appreciate that, but in high density areas, house is not really an option

Re: The Costs of Homeownership Are Skyrocketing

#18

Post by JohnTHaller »

Fire-Dragon-DoL wrote: post #17
JohnTHaller wrote: post #7

From 2000 to 2022 in the US adjusted for inflation: The US median income has gone up about 10.5% The average cost per sq foot of new single family home has gone up about 40% The average sale price of a home has gone up about 60% The median sale price of a house has gone up about 70% https://www.statista.com/statistics/682549/average-price-per... https://fred.stlouisfed.org/series/ASPUS https://fred.stlouisfed.org/ser…

What about condos? I know US don't appreciate that, but in high density areas, house is not really an option

The average price of a condo in the US was $357,600 as of July 2023. It varies by location with cities being more expensive. $1.1 million average in NYC. $350,000 in Chicago.

Re: The Costs of Homeownership Are Skyrocketing

#19

Post by Fire-Dragon-DoL »

JohnTHaller wrote: post #18
Fire-Dragon-DoL wrote: post #17

Earlier quoted context omitted.

What about condos? I know US don't appreciate that, but in high density areas, house is not really an option

The average price of a condo in the US was $357,600 as of July 2023. It varies by location with cities being more expensive. $1.1 million average in NYC. $350,000 in Chicago.

Yeah... Damn Vancouver, same price as NYC but salaries 1/4 or less
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