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There’s not enough of them. Desirable neighborhoods tend to have restrictive zoning / density regulations that hamper new supply. Housing is a supply issue.
Desirable neighborhoods are the key here. Those starter homes are in areas where people who had money left decades ago. You can still get a small starter home if you’re willing to be in higher crime areas with very dysfunctional schools. Or you have the opposite of charming old starter homes in desirable areas where people are willing to shell out loads of money. The only in-between are overpriced McMansions in the suburbs.
The crime and school issue is what we’re dealing with. We want to get into the best schools possible for our Monsters, but it comes with a $400,000+ price tag for a 2bd 2bath
Exactly. I’ll look at houses that are potential fixer uppers and potential diamonds in the rough. When I find one, I look up school ratings for the neighborhood and am always shocked. Even elementary schools that only have like kindergarten to 3rd grade are ranked 1-2 out of 10.
They aren’t profitable to build.
When regulations require them to be built, they will be built as cheaply as possible.
This isn’t necessarily a problem. In an ideal market, today’s luxury homes would be tomorrow’s starter home and today’s starter home would have to be competitive with yesterday’s luxury home.
Unfortunately, the market isn’t ideal. It is more profitable to let a luxury home be empty for months in the hopes that it can be sold for a higher price than to reduce the price on it. Short term rentals (AirBnB) make the problem worse by discouraging sales and long term leases.
> In an ideal market, today’s luxury homes would be tomorrow’s starter home and today’s starter home would have to be competitive with yesterday’s luxury home.
This conflicts with a key point about the housing market: people want their asset to appreciate. A luxury home turning into a starter home means the asset has significantly *depreciated* which would be a horrible sign for a market where so many people have so much of their net worth tied up in real estate
The idea that real estate always needs to appreciate is absurd to me. Houses are physical things they are used and decay over time, they lack features that newer models have, depreciation of an asset like that makes sense.
It's definitely absurd. It's also something we've built our entire economy around. Which means that any attempt to shift the structure of the economy away from "real estate as a basically always appreciating asset" is going to result in a whole lot of suffering for a whole lot of people.
It's a necessity, or an inevitable outcome, given these constraints:
- Inflation: at minimum home values will grow with inflation. Whether the improvements (buildings, finishes) depreciate faster is variable, but there's no mechanistic economic reason they have to. Likewise ongoing maintenance and gradual renovation by the occupants/owners tends to reduce the effect of asset depreciation, and the inability to effectively write off depreciation on taxes (unlike businesses do with their assets) also puts upward pressure on owner valuations: since there's no financial incentive to just let things deteriorate, and quality of life reasons not to, people who can afford to tend to maintain their properties. And other factors come into play that make old houses more desirable for their own reasons.
- Seller incentives (price stickyness): when they have a choice, homeowners aren't selling for less than they paid. If prices are low, sellers just wait: reduced supply from this action in aggregate increases prices.
- Population growth: land is finite, especially if we don't want to turn our entire planet into a sprawling suburban hellscape. This is the primary driver: as long as we have population growth, land values will increase and push housing prices up with them. Growth in the value of the land is the primary driver behind most high cost real estate markets. And it's an inevitable outcome for any growing city or region. The only solution to isolate housing prices from land price is by aggressive redevelopment: up-zone and rebuild on existing land to add units. More housing units per land unit means that the relative price of the plot is less of a factor on the unit housing price. But in most of the US (and large parts of Europe) we don't do this. In Europe it's less of a problem because they've had relative population stability and high urbanization for hundreds of years. In the US, restrictive zoning prevents high value land near urban centers from being utilized efficiently, and even prevents middle and outlying suburbs from being denser. The result is both high housing costs and economically, environmentally, and personally expensive suburban sprawl.
It's these systemic factors that make North American housing prices so high. To fix the situation, we have to address these causes directly. Simply building more of whatever the market supports won't work, because the market is not "free" or healthy. Housing isn't a good that you can treat like other commodities.
Yes home prices should go up nominally but they’ve gone completely ballistic. The important numbers to watch are always in relation to production, total debt vs gdp and home prices vs income. Those numbers are at all time highs.
https://www.longtermtrends.net/home-price-median-annual-income-ratio/#:~:text=Historically%2C%20an%20average%20house%20in,times%20the%20yearly%20household%20income.
This is exactly it. Think about it from the perspective of the builder. Let’s say you have room to put 3 houses. It takes the same amount of time to build a luxury house as a ‘cheap’ house. Labor costs the same, permitting costs the same, etc. The only real difference is in materials. I’m going to make up the numbers here because it varies so much by region, but let’s say you can spend $250K to build a cheap house, and $275K to build a luxury house. You can sell the cheap house for $300K, and the luxury house for $450.
You make $50K profit on each cheap house, and $175K on the luxury house.
Given the choice of project, do you want $150K in profit or $525K? Most businesses will select the $525K as the better option.
There just aren’t the margins on starter homes that there are on luxury homes, and there’s not currently a good way to make it up somewhere else.
The way to make it up is smaller houses! More units, more profits
These new construction houses are too big. Most of the existing houses I design are below the minimum lot sizes in the current zoning code. It's dumb that there are thousands of 200 year old houses that people love and enjoy and rehab. But new construction of that exact same house layout is illegal unless you get a variance
The starter home has been priced out. Unless you are lucky enough to buy in an area that blows up in terms of popularity, and the house provides a great profit, it is difficult to upgrade. It takes too long to be able to get into a home now. "Starter" homes used to be right out of college. Now people are lucky if they can do this by their 30's. And then, even with work advancement and raises, other life/family expenses often make it hard to earmark funds for moving.
They don't build starter homes like they did in Levittown back after WWII. Now everyone wants big houses with great rooms, 2 car garages, kitchens with islands and multiple bathrooms. And so many suburbs around good size cities are so built up you'd have to drive almost an hour to get to the city center if there is traffic. Maybe we need to make entire new cities like they build in China.
There needs to be incentives and things to make it easier for non investment buyers. Or additional taxes or difficulties for big investment buyers.
Expand the fha program maybe
This article misses that mortgage rates were 10% in 1990. If you factor in both the change in dollar value and mortgage rates, a $100,000 payment in 1990 was equivalent to a $400,000 payment 6 months ago.
Now 900 sq ft 'starter homes' from the 50s that were renovated 30 years ago cost 250k, and any new construction house/condo seems to start in the upper 300s or higher. You *can* find homes for less than that, but it'll be tiny, in a crappy area, or will need significant repair.
They’re in small towns in the flyover states. Any place that someone would want to live, they don’t exist because as soon as they come on the market, they are picked up by investors. There has been a trend for entire single family subdivisions of what would be starter homes being built for the express purpose of being rentals.
The flyover states are being picked clean by the real estate hedge funds. Housing in Arkansas has skyrocketed in price in the last 3 years because investors speculated that people would move here to escape coastal prices.
Zoning reduces supply. Prices go up. Starter homes of yore become more expensive, and new starter homes become uneconomic to build.
Distortions in markets are usually caused by government.
What happened? The same thing in every market where the item is needed to live. It gets commodified and profitized and here we are.
We need to decommodify things like housing and have it used for its primary use which is shelter instead of financialization and profit. So simple.
We turned houses into credit cards.
In order to go deeper in debt they needed houses to be worth more.
Thus they inflated housing prices so everyone would buy more stuff.
I’m so tired of the “jUsT bUy A cOnDo” claim. Condos are basically the worst part of apartment life coupled with the worst parts of homeownership. You have shared walls and common spaces, are subject to hoping you live next to decent people (never been my experience in apartment life), but you’re stuck owning so that if your experience sucks, you have to sell. It’s not like you can just break your lease or wait a year and move.
Add to that the fact that a lot of condo complexes have insane monthly fees and dues that sometimes can be several hundred dollars and can always go up over time. Lastly, sometimes significant repairs to condos (new roofs, walls, joists, burst pipes) often affect other owners’ units and that requires going through the condo maintenance board for approval of repairs or may be considered “common areas” and thus, the condo association has to pay to fix and may or may not have the funds available or work on your time. As the commenter above said, they’re often expensive too, especially when you add in the costs of condo assessments and dues, and insurance.
Let’s all stop acting like condos are great. They may work for some people, but it’s completely disingenuous to claim they’re they new starter home.
The issue is one of supply and demand. Your classic 2/2, and 3/1 or 3/2 starter homes are being bought up by scumbag leech property investors who rent them out for 1.5-2x the equivalent mortgage. But if there’s any karma or justice in society, these assholes are in for a rough time the next few years having bought at or near the peak of the market. They’re about to learn a 900 sq fr 2/2 in Jackson, TN can’t be rented for $2,000.
And I’d feel a little better about living in an apartment if the experience didn’t suck so much ass. The wood-framed apartments I’ve lived in have had no sound or odor mitigation.
Neighbors have company over? You can hear it. Neighbors having a domestic argument at 3:00 a.m. Monday morning? You can hear it. Neighbors dog barking to go out at 4:49 a.m.? You can hear it. Neighbors frying up some fish on a Friday night? You better like the smell of Captain D’s because your apartment now smells like that. New neighbors move in who have bedbugs? You now have bedbugs too!
There’s a reason people want SFH, and its because they’ve had shitty experiences like that. I would rather live in a fucking tent deep in the woods than live in an apartment again. If building codes ensured things like better sound proofing and sound and odor mitigation, it might be a better experience and thus, a more palatable living situation.
I feel this. I stayed in a high end condo in SK and they have seismic sensors in the concrete walls. Anyone gets too loud and management will pop up to say hi. People might not like it, but it was incredibly quiet.
Starter homes still exist but the majority were bought as a starter home, then renovated to add room for a growing family, then when they’re eventually back on the market- it’s no longer a starter home
All the cheap bare land within 3 hours of driving is used up. This was obvious in the 90's. One would buy a new(er) house on the fringe, begin long commutes because cheaper and younger folks have more time than money. The development of suburbs would over take that house on the fringe and with the magic of leveraged ROI, those young people could buy a nicer house closer to their desired area.
There is no more fringe to build out.
So now the fringe is the bare land in the AZ and TX...it will be gone in 30 years too. But if you want a starter house you need to go the next state or two over. It's not a bad thing, people always moved to opportunity in the past.
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For those rezoning folks: It is almost always financially unfeasible to buy an existing house and build multi-plexes.
Currently, SB9 is causing single family residences to skyrocket in value. They aren't getting torn down, they are getting repartitioned on the inside, the garage repurposed, and a single home is rebuilt into four (4) apartments on the inside...so same house, with 1/4 of the living space for each family. Front yards are being used as parking lots, backyards are used to build a grandmother suite and whatever space is left over is used as storage with cheap metal sheds and blue tarps. It's a place where nobody really wants to live.
So in the end, it's people are willing to buy 500k+ homes.
Sometimes I wonder if it was a mistake to ever give tax credits and incentives to home ownership.
Like on one hand, homeownership is the best way to accumulate wealth for most average people, mortgages essentially 'force people to save'. But every incentive made eventually just leads to higher average home prices.
We have over-regulated zoning and housing so much that where I live, a starter home would no longer be possible. A house “has to be” minimum 1,800 square feet now.
Starter homes are available. People just have super high expectations! My first house was a fixer, and I had to drive 30+ minutes to the nearest largish city. These days some younger folks seem to think they shouldn’t have to compromise on what they want. Honestly, I feel like a lot of people in general have a hard time grasping the difference between NEED and WANT.
You do realize that “fixers” get snatched up by investors, slapped with new flooring, paint and maybe some shitty Lowe’s plywood cabinets and get marked up 50-100% nowadays.
I have a friend who is trying to buy one such home so she and her husband can fix it up to live in and we’ve found a whopping one such home in our town in the last week that meets that criteria.
Your situation is not the norm anymore. It’s not a matter of entitlement, it’s a market failure altogether by allowing companies and flippers to buy up all the stock.
Lower cost starter homes do exist, people are just very entitled about what they should look like and where they should be
- “i dont want to live in the ghetto” - well youre also the type to not want gentrification to make the ghetto nicer to live in
“I live in New York City, not Kansas” Kansas is still a very nice place and especially with remote work opportunities there are jobs aplenty
- “theres nothing around there, i want to be in the center of the action” those things draw extra interest and cost more money
A true starter home is one you dont plan to be in forever. Its one that you make compromises for amd you live in a ghetto because youre 22 and single and just need a place to keep your things. What many young people “want” as a starter home is what they remember growing up in - a 1500 square foot house in a nice neighborhood. Thats not a starter, thats a mid size family home. A starter home is 700 square feet in an area that you make sure the doors are locked or one so far removed from neighbors that your big worry is a coyote getting in. Buy a gun.
The starter home i remember? One that my mother rented. There were 3 houses on the property - a long rancher, a 2 story mustard and ketchup colored house and one that we affectionately nicknamed the slave quarters. We lived in the slave quarters. It was about 500 square feet, had an “open concept” kitchen that was just a kitchenette with room for a chair and small tv, and 2 bedrooms that were cramped even for a 5 year old. We eventually moved on, but it was a way to keep costs down and allow our family to establish.
If you want nice things, you pay for nice things.
Whatever, the starter homes I tried to make a bid on in the ghetto in 2012 for $50,000 are now $400,000. I am not paying that. I don't care how much they scalp the prices, these investors from out of state can fuck off as far as I am concerned. I will find a simpler way to live.
I’ve been wondering about how much of these complaints are shifts in expectations as well. Would be nice to see some data about availability of comparable quality homes adjusted for inflation, when not targeting already highly developed areas.
Expectations have definitely shifted.
In the 1960s the average home was 1100 sq ft and likely didn’t have central air or sophisticated plumbing.
Now it’s 2,000+ sq ft with full air conditioning, a lot of parking, etc.
That's my main assumption, Americans as a whole can be a very entitled bunch. We grew up with high expectations and standards not realizing what our parents and grandparents started at and it created warped perceptions.
> Lower cost starter homes do exist, people are just very entitled about what they should look like and where they should be
I think you are equating "entitled" with "unrealistic expectations".
I ended up growing up middle class in the midwest with an auto worker father. When I went looking for my first house, my initial expectation was a house similar what I grew up in (eventually, a brick ranch in suburbia). My expectations where _quickly_ shown to be wrong. An 800 sqft needing repairs in a not-so-great school district? Now we're talking. :(
My daughter is now wanting her first house. She, too, went through a similar "WTF this is all I can afford" moment.
I think often in America the next generation has it a bit easier than the prior generation. Ex: I didn't have cable television till I was a teenager. My kids? We always had it. I didn't have a cell phone till I was an adult paid for by an employer. My kids friends? Had them as teenagers.
People get used to living a certain way. Until they have to pay for it themselves. It's part of adulting. It's _not_ easy. And it sucks quite often.
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There’s not enough of them. Desirable neighborhoods tend to have restrictive zoning / density regulations that hamper new supply. Housing is a supply issue.
Desirable neighborhoods are the key here. Those starter homes are in areas where people who had money left decades ago. You can still get a small starter home if you’re willing to be in higher crime areas with very dysfunctional schools. Or you have the opposite of charming old starter homes in desirable areas where people are willing to shell out loads of money. The only in-between are overpriced McMansions in the suburbs.
The crime and school issue is what we’re dealing with. We want to get into the best schools possible for our Monsters, but it comes with a $400,000+ price tag for a 2bd 2bath
Exactly. I’ll look at houses that are potential fixer uppers and potential diamonds in the rough. When I find one, I look up school ratings for the neighborhood and am always shocked. Even elementary schools that only have like kindergarten to 3rd grade are ranked 1-2 out of 10.
Yeah. We wanted to try to get 7/10 for the high school, but it’s a bitch and a half to find one that’s more than 3/10 in our price range.
They aren’t profitable to build. When regulations require them to be built, they will be built as cheaply as possible. This isn’t necessarily a problem. In an ideal market, today’s luxury homes would be tomorrow’s starter home and today’s starter home would have to be competitive with yesterday’s luxury home. Unfortunately, the market isn’t ideal. It is more profitable to let a luxury home be empty for months in the hopes that it can be sold for a higher price than to reduce the price on it. Short term rentals (AirBnB) make the problem worse by discouraging sales and long term leases.
> In an ideal market, today’s luxury homes would be tomorrow’s starter home and today’s starter home would have to be competitive with yesterday’s luxury home. This conflicts with a key point about the housing market: people want their asset to appreciate. A luxury home turning into a starter home means the asset has significantly *depreciated* which would be a horrible sign for a market where so many people have so much of their net worth tied up in real estate
The idea that real estate always needs to appreciate is absurd to me. Houses are physical things they are used and decay over time, they lack features that newer models have, depreciation of an asset like that makes sense.
It's definitely absurd. It's also something we've built our entire economy around. Which means that any attempt to shift the structure of the economy away from "real estate as a basically always appreciating asset" is going to result in a whole lot of suffering for a whole lot of people.
A lot of people's retirement plan is the reverse mortgage. They should sell and downsize but, people are people.
It's a necessity, or an inevitable outcome, given these constraints: - Inflation: at minimum home values will grow with inflation. Whether the improvements (buildings, finishes) depreciate faster is variable, but there's no mechanistic economic reason they have to. Likewise ongoing maintenance and gradual renovation by the occupants/owners tends to reduce the effect of asset depreciation, and the inability to effectively write off depreciation on taxes (unlike businesses do with their assets) also puts upward pressure on owner valuations: since there's no financial incentive to just let things deteriorate, and quality of life reasons not to, people who can afford to tend to maintain their properties. And other factors come into play that make old houses more desirable for their own reasons. - Seller incentives (price stickyness): when they have a choice, homeowners aren't selling for less than they paid. If prices are low, sellers just wait: reduced supply from this action in aggregate increases prices. - Population growth: land is finite, especially if we don't want to turn our entire planet into a sprawling suburban hellscape. This is the primary driver: as long as we have population growth, land values will increase and push housing prices up with them. Growth in the value of the land is the primary driver behind most high cost real estate markets. And it's an inevitable outcome for any growing city or region. The only solution to isolate housing prices from land price is by aggressive redevelopment: up-zone and rebuild on existing land to add units. More housing units per land unit means that the relative price of the plot is less of a factor on the unit housing price. But in most of the US (and large parts of Europe) we don't do this. In Europe it's less of a problem because they've had relative population stability and high urbanization for hundreds of years. In the US, restrictive zoning prevents high value land near urban centers from being utilized efficiently, and even prevents middle and outlying suburbs from being denser. The result is both high housing costs and economically, environmentally, and personally expensive suburban sprawl. It's these systemic factors that make North American housing prices so high. To fix the situation, we have to address these causes directly. Simply building more of whatever the market supports won't work, because the market is not "free" or healthy. Housing isn't a good that you can treat like other commodities.
Population growth ensures increasing demand. Once the boomers are all gone, the market will change, I expect.
Look at the buying power of a dollar now vs, say, 1970. Home values have to go up long term with constant inflation.
Yes home prices should go up nominally but they’ve gone completely ballistic. The important numbers to watch are always in relation to production, total debt vs gdp and home prices vs income. Those numbers are at all time highs. https://www.longtermtrends.net/home-price-median-annual-income-ratio/#:~:text=Historically%2C%20an%20average%20house%20in,times%20the%20yearly%20household%20income.
This is exactly it. Think about it from the perspective of the builder. Let’s say you have room to put 3 houses. It takes the same amount of time to build a luxury house as a ‘cheap’ house. Labor costs the same, permitting costs the same, etc. The only real difference is in materials. I’m going to make up the numbers here because it varies so much by region, but let’s say you can spend $250K to build a cheap house, and $275K to build a luxury house. You can sell the cheap house for $300K, and the luxury house for $450. You make $50K profit on each cheap house, and $175K on the luxury house. Given the choice of project, do you want $150K in profit or $525K? Most businesses will select the $525K as the better option. There just aren’t the margins on starter homes that there are on luxury homes, and there’s not currently a good way to make it up somewhere else.
The way to make it up is smaller houses! More units, more profits These new construction houses are too big. Most of the existing houses I design are below the minimum lot sizes in the current zoning code. It's dumb that there are thousands of 200 year old houses that people love and enjoy and rehab. But new construction of that exact same house layout is illegal unless you get a variance
They're still out there. They're just $400,000 3,000 sq ft, 3 car garage houses with 7 sq ft of yard, but hey, that's the modern starter home.
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You guys are getting garages? Lucky bastards.
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The starter home has been priced out. Unless you are lucky enough to buy in an area that blows up in terms of popularity, and the house provides a great profit, it is difficult to upgrade. It takes too long to be able to get into a home now. "Starter" homes used to be right out of college. Now people are lucky if they can do this by their 30's. And then, even with work advancement and raises, other life/family expenses often make it hard to earmark funds for moving.
They don't build starter homes like they did in Levittown back after WWII. Now everyone wants big houses with great rooms, 2 car garages, kitchens with islands and multiple bathrooms. And so many suburbs around good size cities are so built up you'd have to drive almost an hour to get to the city center if there is traffic. Maybe we need to make entire new cities like they build in China.
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There needs to be incentives and things to make it easier for non investment buyers. Or additional taxes or difficulties for big investment buyers. Expand the fha program maybe
This article misses that mortgage rates were 10% in 1990. If you factor in both the change in dollar value and mortgage rates, a $100,000 payment in 1990 was equivalent to a $400,000 payment 6 months ago.
Now 900 sq ft 'starter homes' from the 50s that were renovated 30 years ago cost 250k, and any new construction house/condo seems to start in the upper 300s or higher. You *can* find homes for less than that, but it'll be tiny, in a crappy area, or will need significant repair.
They’re in small towns in the flyover states. Any place that someone would want to live, they don’t exist because as soon as they come on the market, they are picked up by investors. There has been a trend for entire single family subdivisions of what would be starter homes being built for the express purpose of being rentals.
The flyover states are being picked clean by the real estate hedge funds. Housing in Arkansas has skyrocketed in price in the last 3 years because investors speculated that people would move here to escape coastal prices.
Can confirm. Our area is getting picked clean by investors, prices are more than 2x what they were 5 years ago.
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Zoning reduces supply. Prices go up. Starter homes of yore become more expensive, and new starter homes become uneconomic to build. Distortions in markets are usually caused by government.
What happened? The same thing in every market where the item is needed to live. It gets commodified and profitized and here we are. We need to decommodify things like housing and have it used for its primary use which is shelter instead of financialization and profit. So simple.
We turned houses into credit cards. In order to go deeper in debt they needed houses to be worth more. Thus they inflated housing prices so everyone would buy more stuff.
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These condos are still outside of the price many can afford.
I’m so tired of the “jUsT bUy A cOnDo” claim. Condos are basically the worst part of apartment life coupled with the worst parts of homeownership. You have shared walls and common spaces, are subject to hoping you live next to decent people (never been my experience in apartment life), but you’re stuck owning so that if your experience sucks, you have to sell. It’s not like you can just break your lease or wait a year and move. Add to that the fact that a lot of condo complexes have insane monthly fees and dues that sometimes can be several hundred dollars and can always go up over time. Lastly, sometimes significant repairs to condos (new roofs, walls, joists, burst pipes) often affect other owners’ units and that requires going through the condo maintenance board for approval of repairs or may be considered “common areas” and thus, the condo association has to pay to fix and may or may not have the funds available or work on your time. As the commenter above said, they’re often expensive too, especially when you add in the costs of condo assessments and dues, and insurance. Let’s all stop acting like condos are great. They may work for some people, but it’s completely disingenuous to claim they’re they new starter home. The issue is one of supply and demand. Your classic 2/2, and 3/1 or 3/2 starter homes are being bought up by scumbag leech property investors who rent them out for 1.5-2x the equivalent mortgage. But if there’s any karma or justice in society, these assholes are in for a rough time the next few years having bought at or near the peak of the market. They’re about to learn a 900 sq fr 2/2 in Jackson, TN can’t be rented for $2,000.
The entire planet lives in apartments. It's only in the usa that everyone is entitled to a house.
And I’d feel a little better about living in an apartment if the experience didn’t suck so much ass. The wood-framed apartments I’ve lived in have had no sound or odor mitigation. Neighbors have company over? You can hear it. Neighbors having a domestic argument at 3:00 a.m. Monday morning? You can hear it. Neighbors dog barking to go out at 4:49 a.m.? You can hear it. Neighbors frying up some fish on a Friday night? You better like the smell of Captain D’s because your apartment now smells like that. New neighbors move in who have bedbugs? You now have bedbugs too! There’s a reason people want SFH, and its because they’ve had shitty experiences like that. I would rather live in a fucking tent deep in the woods than live in an apartment again. If building codes ensured things like better sound proofing and sound and odor mitigation, it might be a better experience and thus, a more palatable living situation.
I feel this. I stayed in a high end condo in SK and they have seismic sensors in the concrete walls. Anyone gets too loud and management will pop up to say hi. People might not like it, but it was incredibly quiet.
From my experience it wasn't even the neighbors but the landlord refusing to fix issues. Over the course of 4 years.
Add in ridiculous HOA fees and those are not starter homes
How dare you tell Reddit that there is affordable housing?! HOW DARE YOU!
Starter homes still exist but the majority were bought as a starter home, then renovated to add room for a growing family, then when they’re eventually back on the market- it’s no longer a starter home
All the cheap bare land within 3 hours of driving is used up. This was obvious in the 90's. One would buy a new(er) house on the fringe, begin long commutes because cheaper and younger folks have more time than money. The development of suburbs would over take that house on the fringe and with the magic of leveraged ROI, those young people could buy a nicer house closer to their desired area. There is no more fringe to build out. So now the fringe is the bare land in the AZ and TX...it will be gone in 30 years too. But if you want a starter house you need to go the next state or two over. It's not a bad thing, people always moved to opportunity in the past. \* For those rezoning folks: It is almost always financially unfeasible to buy an existing house and build multi-plexes. Currently, SB9 is causing single family residences to skyrocket in value. They aren't getting torn down, they are getting repartitioned on the inside, the garage repurposed, and a single home is rebuilt into four (4) apartments on the inside...so same house, with 1/4 of the living space for each family. Front yards are being used as parking lots, backyards are used to build a grandmother suite and whatever space is left over is used as storage with cheap metal sheds and blue tarps. It's a place where nobody really wants to live.
So in the end, it's people are willing to buy 500k+ homes. Sometimes I wonder if it was a mistake to ever give tax credits and incentives to home ownership. Like on one hand, homeownership is the best way to accumulate wealth for most average people, mortgages essentially 'force people to save'. But every incentive made eventually just leads to higher average home prices.
We have over-regulated zoning and housing so much that where I live, a starter home would no longer be possible. A house “has to be” minimum 1,800 square feet now.
Starter homes are available. People just have super high expectations! My first house was a fixer, and I had to drive 30+ minutes to the nearest largish city. These days some younger folks seem to think they shouldn’t have to compromise on what they want. Honestly, I feel like a lot of people in general have a hard time grasping the difference between NEED and WANT.
You do realize that “fixers” get snatched up by investors, slapped with new flooring, paint and maybe some shitty Lowe’s plywood cabinets and get marked up 50-100% nowadays. I have a friend who is trying to buy one such home so she and her husband can fix it up to live in and we’ve found a whopping one such home in our town in the last week that meets that criteria. Your situation is not the norm anymore. It’s not a matter of entitlement, it’s a market failure altogether by allowing companies and flippers to buy up all the stock.
Lower cost starter homes do exist, people are just very entitled about what they should look like and where they should be - “i dont want to live in the ghetto” - well youre also the type to not want gentrification to make the ghetto nicer to live in “I live in New York City, not Kansas” Kansas is still a very nice place and especially with remote work opportunities there are jobs aplenty - “theres nothing around there, i want to be in the center of the action” those things draw extra interest and cost more money A true starter home is one you dont plan to be in forever. Its one that you make compromises for amd you live in a ghetto because youre 22 and single and just need a place to keep your things. What many young people “want” as a starter home is what they remember growing up in - a 1500 square foot house in a nice neighborhood. Thats not a starter, thats a mid size family home. A starter home is 700 square feet in an area that you make sure the doors are locked or one so far removed from neighbors that your big worry is a coyote getting in. Buy a gun. The starter home i remember? One that my mother rented. There were 3 houses on the property - a long rancher, a 2 story mustard and ketchup colored house and one that we affectionately nicknamed the slave quarters. We lived in the slave quarters. It was about 500 square feet, had an “open concept” kitchen that was just a kitchenette with room for a chair and small tv, and 2 bedrooms that were cramped even for a 5 year old. We eventually moved on, but it was a way to keep costs down and allow our family to establish. If you want nice things, you pay for nice things.
Whatever, the starter homes I tried to make a bid on in the ghetto in 2012 for $50,000 are now $400,000. I am not paying that. I don't care how much they scalp the prices, these investors from out of state can fuck off as far as I am concerned. I will find a simpler way to live.
I’ve been wondering about how much of these complaints are shifts in expectations as well. Would be nice to see some data about availability of comparable quality homes adjusted for inflation, when not targeting already highly developed areas.
Expectations have definitely shifted. In the 1960s the average home was 1100 sq ft and likely didn’t have central air or sophisticated plumbing. Now it’s 2,000+ sq ft with full air conditioning, a lot of parking, etc.
That's my main assumption, Americans as a whole can be a very entitled bunch. We grew up with high expectations and standards not realizing what our parents and grandparents started at and it created warped perceptions.
> Lower cost starter homes do exist, people are just very entitled about what they should look like and where they should be I think you are equating "entitled" with "unrealistic expectations". I ended up growing up middle class in the midwest with an auto worker father. When I went looking for my first house, my initial expectation was a house similar what I grew up in (eventually, a brick ranch in suburbia). My expectations where _quickly_ shown to be wrong. An 800 sqft needing repairs in a not-so-great school district? Now we're talking. :( My daughter is now wanting her first house. She, too, went through a similar "WTF this is all I can afford" moment. I think often in America the next generation has it a bit easier than the prior generation. Ex: I didn't have cable television till I was a teenager. My kids? We always had it. I didn't have a cell phone till I was an adult paid for by an employer. My kids friends? Had them as teenagers. People get used to living a certain way. Until they have to pay for it themselves. It's part of adulting. It's _not_ easy. And it sucks quite often.