Housing - Why are smaller houses not being built?

[Pew]

Originally Posted by 02SE

I have seen the light, and am now ashamed to admit that when I worked in consumer automotive repair, I actually had the audacity to insist on being paid for my services. Just like those evil people that take the risk of buying real estate with the hope of turning a profit after making improvements to make the property attractive, and possibly, selling it.

Feel shame no more, as you can repent by sending me the pay you were given for your services.

 

[supton]

Originally Posted by oilpsi2high

For the same reasons small cars are no longer being built - nobody is buying them, and nobody wants them.

Versa, Mirage, Spark come to mind. Out there but yeah sales are low. Could go with a small modular house, but you'd have to save up to buy the land outright, then you could secure a loan. Not as fast as buying someone else's house, though.

 

[02SE]

Originally Posted by Pew

Originally Posted by 02SE

I have seen the light, and am now ashamed to admit that when I worked in consumer automotive repair, I actually had the audacity to insist on being paid for my services. Just like those evil people that take the risk of buying real estate with the hope of turning a profit after making improvements to make the property attractive, and possibly, selling it.

Feel shame no more, as you can repent by sending me the pay you were given for your services.

Too late, I already spent it starting and keeping my own business afloat, until it was eventually self-sustaining and making a profit.

 

[Mr Nice]

Originally Posted by pandus13

Originally Posted by supton

Originally Posted by Win

Owning real estate is how the average guy gets wealthy. Not the stock market, real estate.

Not sure if the bogleheads forum would agree with you on that one.

I could get to the end of the line in a corvette, on a push bike, on a rocket, excavator, turtle, etc etc I just need to get there. Stocks may not be for me and real estate may not be for you. RE: barber: it's a connections/ People Relations job. You get to talk with everybody and everybody knows you. So he will find out first about a house to sell, have a handyman/pro ready when needed, Mr Win when lawyer needed, and many others. It's not a case of being there at the right moment, but making yourself be there at the right moment.

I've met a few wealthy folks ($5M+ net worth) and none of them owned rental properties or had the desire to be a landlord....

 

[tony1679]

Originally Posted by oilpsi2high

For the same reasons small cars are no longer being built - nobody is buying them, and nobody wants them.

Apparently you didn't see my sig. Both vehicles were bought within the last year... See the theme here?

 

[pandus13]

Originally Posted by Mr Nice

... ... I've met a few wealthy folks ($5M+ net worth) and none of them owned rental properties or had the desire to be a landlord....

Yup, they invest in REIT, or became very good at being lenders to real estate builders/landlords with a system+performance+vision in place. Or go with what they know: stocks, building and running niche businesses, etc etc.

 

[pandus13]

Originally Posted by tony1679

Originally Posted by oilpsi2high

For the same reasons small cars are no longer being built - nobody is buying them, and nobody wants them.

Apparently you didn't see my sig. Both vehicles were bought within the last year... See the theme here?

I found a report/article couple years ago that said, compared with 2004-2008, the cost now after regulations and many other taxes made it that houses had to be a certain sq footage to get any profit. You? how about you take your mechanic skills, learn some residential/commercial HVAC, find out what is needed for a specialized skill like house cleanup and re-construction after flood/fire damage, find your burned up dream house, and renovate it to your heart desire. Warning: regulating the property owning didn't work really well in some lands far far away. I lived through it, and it ain't pretty.

 

[Rmay635703]

Originally Posted by pandus13

Warning: regulating the property owning didn't work really well in some lands far far away. I lived through it, and it ain't pretty.

Property ownership is likely far more regulated here than wherever you came from. The proper way to prevent a couple slumlords from buying up 1/3 + of property in an area (as has happened here) is to simply tax them more than individuals who own and live in their own home. Sadly we do the opposite and incentivize large property blocks rented under corporate ownership and decentivize individual ownership by allowing corporate owners to negotiate their property taxes and turn around and write off depreciation further lowering tax.

 

[tony1679]

Originally Posted by Rmay635703

Originally Posted by pandus13

Warning: regulating the property owning didn't work really well in some lands far far away. I lived through it, and it ain't pretty.

Property ownership is likely far more regulated here than wherever you came from. The proper way to prevent a couple slumlords from buying up 1/3 + of property in an area (as has happened here) is to simply tax them more than individuals who own and live in their own home. Sadly we do the opposite and incentivize large property blocks rented under corporate ownership and decentivize individual ownership by allowing corporate owners to negotiate their property taxes and turn around and write off depreciation further lowering tax.

Sounds right. Pay your part. I don't want to pay a lot, therefore I don't want a lot of house. How does this not make sense? I feel with each property you own after one, your tax rate goes up X%. The more you "make" the more you pay. No exceptions. But this apparently associates me with Marx, even though I lean far right and am extremely anti-regulation and anti-overreach. Interesting.

 

[Wolf359]

Originally Posted by tony1679

Sounds right. Pay your part. I don't want to pay a lot, therefore I don't want a lot of house. How does this not make sense? I feel with each property you own after one, your tax rate goes up X%. The more you "make" the more you pay. No exceptions. But this apparently associates me with Marx, even though I lean far right and am extremely anti-regulation and anti-overreach. Interesting.

Makes a lot of sense. But like used cars, just doesn't work that way. There's lots of demand for used cars as more are sold than new cars. Why can't automakers make a new car as cheap as a used car? The math just isn't there, this whole thread is basically how you can't make any money building a small house. The standard for real estate is highest and best use. If you know you can make a $100 profit on something, would you instead do it for $50? If you're anti-regulation, then you can't be for regulating the ownership of homes. Did you know you don't even need to be a US citizen to buy a property? Anyone who shows up with the money can buy a property in this country. Some other countries have limits. I'm not sure if you heard of how the Japanese bought up a lot of real estate a while ago, then the market collapsed and they got stuck with a lot of it.

 

[Skippy722]

Originally Posted by tony1679

Originally Posted by Rmay635703

Originally Posted by pandus13

Warning: regulating the property owning didn't work really well in some lands far far away. I lived through it, and it ain't pretty.

Property ownership is likely far more regulated here than wherever you came from. The proper way to prevent a couple slumlords from buying up 1/3 + of property in an area (as has happened here) is to simply tax them more than individuals who own and live in their own home. Sadly we do the opposite and incentivize large property blocks rented under corporate ownership and decentivize individual ownership by allowing corporate owners to negotiate their property taxes and turn around and write off depreciation further lowering tax.

Sounds right. Pay your part. I don't want to pay a lot, therefore I don't want a lot of house. How does this not make sense? I feel with each property you own after one, your tax rate goes up X%. The more you "make" the more you pay. No exceptions. But this apparently associates me with Marx, even though I lean far right and am extremely anti-regulation and anti-overreach. Interesting.

I think this is a good idea. The house we bought was a former rental house, they were paying over 3 times what we were paying for property taxes, and that was with their mortgage exemption.

 

[Ws6]

It's almost as if you'd be shocked to know that income tax goes up with income...

 

[alarmguy]

Builders are in business to make money, they build the style home that will sell the fastest at the best profit. Its that simple.

 

[tony1679]

Originally Posted by Wolf359

...Why can't automakers make a new car as cheap as a used car?...

They can. They choose not to (although partly due to regulation...mandatory air bags and back-up cameras cost money). If the regulation was taken out of the picture they absolutely could.

Originally Posted by Wolf359

...The math just isn't there, this whole thread is basically how you can't make any money building a small house...

There's plenty of math to support it. I can build my perfect house for between $70-90K plus land (verified by a few builders I've had discussions with). This is including labor, materials...everything. So why can't builders build a similar house (maybe strip a few things like my excessive insulation and framing) for $100K and turn a minimum $10K profit for a quick small build? This is also assuming my builder isn't making any profit (they are), and they can't get materials cheaper than my cost... Why is the math not there? The correct answer is greed. They are like car salesmen and want to squeeze every last dollar out of everyone. Think I'm wrong? Go look at new homes with nails popping out of roofs & drywall. Go look at the mud+tape jobs that an elementary school kid could have done better. We as a society do not live within our means. This is why we're trillions in debt, and buying more house than we need. If the money isn't there, then explain the tiny home movement. I suppose they are literally donating their time and materials?

 

[tony1679]

Originally Posted by Ws6

It's almost as if you'd be shocked to know that income tax goes up with income...

Nah, I'm more shocked at "Ws6" driving a CX5. Stupid sarcastic statements receive stupid sarcastic replies. I'm smarter than you think.

 

[Ws6]

Originally Posted by tony1679

Originally Posted by Ws6

It's almost as if you'd be shocked to know that income tax goes up with income...

Nah, I'm more shocked at "Ws6" driving a CX5. Stupid sarcastic statements receive stupid sarcastic replies. I'm smarter than you think.

The SN IS a whopping what, decade + old? Here you are Mr. Bright Guy. Zillow. Use it. https://www.zillow.com/homedetails/110-Sooner-Rd-Shawnee-OK-74804/2083720948_zpid/ There is your $100K new construction @ 1000sf house in "central OK". Let me guess though, you're going to find "problems" with it...in which case I ask you...why not just have your own built?

 

[Mr Nice]

Tony, If you were my son I would give you the $100K to build your dream house.

 

[Linctex]

Originally Posted by Ws6

https://www.zillow.com/homedetails/110-Sooner-Rd-Shawnee-OK-74804/2083720948_zpid/ There is your $100K new construction @ 1000sf house in "central OK". Let me guess though, you're going to find "problems" with it...in which case I ask you...why not just have your own built?

Wow.... $100 sq foot. That seems high Water well, septic, power, and Lot all add in to the "base price" of building ANYTHING, Regardless of sq foot area

 

[Wolf359]

Originally Posted by Linctex

Originally Posted by Ws6

https://www.zillow.com/homedetails/110-Sooner-Rd-Shawnee-OK-74804/2083720948_zpid/ There is your $100K new construction @ 1000sf house in "central OK". Let me guess though, you're going to find "problems" with it...in which case I ask you...why not just have your own built?

Wow.... $100 sq foot. That seems high Water well, septic, power, and Lot all add in to the "base price" of building ANYTHING, Regardless of sq foot area

You are in a cheap state. Around here, it's about $225/square foot for new construction.

 

[Wolf359]

Originally Posted by tony1679

They can. They choose not to (although partly due to regulation...mandatory air bags and back-up cameras cost money). If the regulation was taken out of the picture they absolutely could.

I think you just answered your own question. They can't because those regulations aren't going away. Same with houses, there's some study that say government regulations do increase the cost of homes. Those aren't going away either.

Originally Posted by tony1679

There's plenty of math to support it. I can build my perfect house for between $70-90K plus land (verified by a few builders I've had discussions with). This is including labor, materials...everything. So why can't builders build a similar house (maybe strip a few things like my excessive insulation and framing) for $100K and turn a minimum $10K profit for a quick small build? This is also assuming my builder isn't making any profit (they are), and they can't get materials cheaper than my cost... Why is the math not there? The correct answer is greed. They are like car salesmen and want to squeeze every last dollar out of everyone. Think I'm wrong? Go look at new homes with nails popping out of roofs & drywall. Go look at the mud+tape jobs that an elementary school kid could have done better. We as a society do not live within our means. This is why we're trillions in debt, and buying more house than we need. If the money isn't there, then explain the tiny home movement. I suppose they are literally donating their time and materials?

I don't think you know the difference between a spec home and building your own. A spec home is where you build the house without a buyer. So you have carrying costs and more risks. The greater the risks, the greater the rewards. If you just contract with a builder to build a house, it's much more limited downside for him as he knows he's getting paid, may even demand payment up front. I already answered your question earlier, why make a 10k profit if they can make a 20k or 50k profit? Who is going to settle for a lower profit? Greed is the basis of capitalism. As for your tiny house movement, again refer to spec house vs build to suit. Two totally different finance mechanisms. Spec homes need financing for the builder, build to suit doesn't, make the owner pay in advance.