You are exactly right, However there are plenty of homes to go around. The problem is the buyers as you posted go for the bigger homes. On the coast here which is more retirement it's easy to find brand new1200 to 1700 sq ft homes (and town homes). SO yeah, the other areas smaller is only older homes.
Average house price vs average hourly wage
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Demand and supply. If there is a demand SFH would be worth more even in smaller sqft size. The fact that they weren't sold in that size but were sold in 2000-3000 sqft, not 4000-5000 sqft, indicates that this is what people want and what people are willing to pay for.
Also please remember it is the location and lot size that cost the money, not the construction material cost. I live in a 1400 sqft house a bit small for a family of 4, but I'm making this choice instead of moving to a lower cost area to get 3000 sqft, and I'm fine with it.
The fact that someone often "took a bath" when selling smaller homes (starter homes) when they are upgrading indicates that it is not something people want to buy new, and therefore not willing to pay more, and therefore builders are not building them.
I really enjoyed my first home. It was only 1150 sq ft. But it was a real home in a good neighborhood and it was mine! $103K and I paid too much. But looking back, it was a bargain.
The home was about 2x our annual income. It was a variable rate mortgage, that went DOWN! Timed perfectly. I was able to afford toys.
The home was about 2x our annual income. It was a variable rate mortgage, that went DOWN! Timed perfectly. I was able to afford toys.
All of this is very market specific. New SFH here can be found in the 1700-1800 sq.ft. range and the 4500+ sq.ft. range, and most sizes in between. Demand for both. Lot size is lot size..in the same general neighborhood a 1/4 acre lot goes for the same price regardless of how big a home is built on it, so you can't just say location and lot size when, although a sizable chunk of the cost, a house double the size of a neighboring house on the same size lot is going to be hundreds of thousands more.
There building this type of home here - in very desirable areas of the city, on an old small lot they did a tear down. However I would expect this property to be likely $650K so its not exactly a starter home. I was told by another member on this board that this house is "defective", which might be true, but its all about location.
Way out of town they are building ranch houses starting at 1500 SF. But honestly a 2500 SF ranch is not that much more money - so I assume that is why people go for the later - price difference maybe from 300K to 400K ish.
Way out of town they are building ranch houses starting at 1500 SF. But honestly a 2500 SF ranch is not that much more money - so I assume that is why people go for the later - price difference maybe from 300K to 400K ish.
Our home here in Los Gatos (South SF Bay Area) is similar. I love it here.
Except that an 1150 square foot home in SF bay is $1.03M, not $103,000.
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For some reason my buddy always calculates price per sq ft. Just yesterday, he stated my house (based on sales in my neighborhood) is $403/sq ft. I can't say if that's good, bad, indifferent, but it's his seemingly only measure of goodness. I just did the calculation for a mcmansion and that's $485. So my house is a 16% discount to a mcmansion. Well, maybe it should be more off than that.
I've often found the threads on forums to have a "shock" value. A 400 sq ft home (looks like a garage with plumbing added) was $450k 5 years ago in Fife WA--yes, that's shocking. But other than that, not much more lol
Would it be shocking to say any home in metro Boston would be 7 figures? No, it is not. It is fact.
And I admit, when I look out the window and I can see part of a home that sold, not listed, sold, in the 900's, it's a bit surprising. Why pay that, and who are you hahahahahahaha
List out all the broken dreams where there's just the pavement left? My list is long. Getting my dream home is one of them. I truly hope and cannot say, if a BMW M will also be on the list. 911 made the list.
The end.
But on the wages, yes, my buddy who makes a lot, did say, just because people have added 200k (to 550) more to the selling price since 3 years ago, doesn't mean I can afford it, it's as if they're making it up.
I've often found the threads on forums to have a "shock" value. A 400 sq ft home (looks like a garage with plumbing added) was $450k 5 years ago in Fife WA--yes, that's shocking. But other than that, not much more lol
Would it be shocking to say any home in metro Boston would be 7 figures? No, it is not. It is fact.
And I admit, when I look out the window and I can see part of a home that sold, not listed, sold, in the 900's, it's a bit surprising. Why pay that, and who are you hahahahahahaha
List out all the broken dreams where there's just the pavement left? My list is long. Getting my dream home is one of them. I truly hope and cannot say, if a BMW M will also be on the list. 911 made the list.
The end.
But on the wages, yes, my buddy who makes a lot, did say, just because people have added 200k (to 550) more to the selling price since 3 years ago, doesn't mean I can afford it, it's as if they're making it up.
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My first home was 4 times our annual income 25 years ago. 10% mortgage rate. Fresh out of college, the wife was still in college.
They didn't call these sub-prime loans then. It was the best we could afford.
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Timing is everything in real estate ! I bought at two low points on that graph thankfully by need not interest rates or waiting it out. I really had no business doing my first home with 3% down ($3000) , 30 years at 8% but glad I did now. A really hot 22 year old real estate agent I dated a few times convinced me to buy at age 23!
Let's just say I am the beneficiary of a ton of appreciation.
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Surprisingly to me, the new condos as you describe, are $1 mil. (2 bed, 3 bed is another $300k). I’m not in Boston—suburban Phila.
No matter what anyone says, imho most people cannot buy a 1 mil property. Although as suggested, working backwards from the payment may be kinder than reality.
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Was thinking about this…mine was 3X, I was single, and. Did 80/10/10 to avoid PMI. This means I had a 6.375% 30 year, and a 7.375 15 year. 2 payments. I paid every extra penny I had towards the 10% loan.
So if I had been married then maybe house 1.5x.
Most people cannot buy one 1M right out of college for sure. But most people can buy it after some asset appreciation from elsewhere (stock appreciation, their previous home appreciation, etc). Those expensive condos are definitely in area with expensive SFH as well.
Nobody says starter home has to be the perfect home and nobody says new home has to be starter home. Nothing wrong with an older home being starter home too.
Back in September 2023 I had posted about tiny homes built in Texas.
Maybe this is the new ‘American Dream’…. ?
Click on Realtor link to see neighborhood.
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Agreed. We get by more than just fine in an 1800sq ft tri level with 6 people.
I'm going to get some thunder thighs going between the garage, kitchen, and office all the time!
My great grandfather’s log cabin on 40 acres of land was said to be worth $200 in the mid 30’s. (Found while researching genealogy) Wonder how that stacks up.
Doesn't help how difficult it's got to build new homes. A potential new housing devolvement was denied south of Columbus, OH because "not in my backyard". Meanwhile, new apartment complexes have been built and are being built all around Columbus. And they are 3+ stories so they can cram more units per acre and market them as luxury and command more rent.
We are turning a larger percentage of the growing population into renters, not home owners.
We are turning a larger percentage of the growing population into renters, not home owners.
Yep, same here - approving nothing but high density apartments and such. Place is swirling counterclockwise.
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