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Looks grim.
Let's compare three states:
Maryland: Knowledge worker based, congested Atlantic corridor. From 1950 until 2024 the median house value appreciated 288% MORE than inflation.
Michigan: Rust-belt. Mid-West. From 1950 until 2024 the median house value appreciated 144% MORE than inflation. That doesn't sound like much but if the median house in Michigan sold for $244k in 2024 then the median house in Michigan in 1950 would sell for $100k inflation-adjusted dollars.
California: Aspirational address for most of the last 75 years. West Coast. From 1950 until 2024 the median house value appreciated by 500%. So if the median house sold for $100k inflation-adjusted dollars in 1950 then the median house now sells for $600k.
Size matters
What is NOT often considered is that the square-feet of newly built houses ballooned during that same period.
Going to the census records from 1950-2000, I found out that the size of the average single family house in 1950 was 983 square feet. By 2000, the average house size shot up to 2,272 square feet... -Source
That is a 130% increase.
The median size peaked in 2015 at about 2500 square-feet but has since fallen back to about 2200 square feet. Source
If you look that increase in footprint, air conditioning, improved windows, insulation, one bathroom-per-occupant and expansive kitchens (both high$/sq-ft spaces), then a 200% increase in the cost of the median cost per single occupant house is not unreasonable.
States that are over that 200% increase is something the younger generations can legitimately complain about, especially for states whose star is fading.
Hat-tip to the still tireless Lucas Machias
Lived in my house for almost 35 years, underbought what I could afford at the time, today, I could not afford to buy the house I live in
ReplyDeleteMy wife and I contracted our 1500 s.f. house ourselves, hiring the subs and doing the 'grunt work' when they had covered the studs. At the time (1995), it cost slightly under $ 45,000 (wife already owned the property) and that was how we ,moved into a paid off house. We are going to file a property tax protest later this month, them claiming the house and property are worth $175,000. The only improvement we have put in was re-roofing the project in 2018. The tax increase this year was nearly $50,.000. Texas is where this is happening.
ReplyDeleteRoofing is normal maintenance like painting, mowing the grass or cleaning the gutters.
DeleteFred in Texas, Tax collectors ain't gonna quit with the stupidity until somebody gets tarred and feathered. I protested again this year and got the market value cut in half. The can't increase the assessed value by more than 10% per year.
DeleteThe only solution is to protest every year. Next year I'm going to track the time I spend and sue for damages. Lost time, pain and suffering etc.i know I don't stand a chance of winning, but if I can make them spend more than they collect from me and then incite some others to do the same, maybe they'll get the idea that the revenue is maxed out.
I found the following as a Meme on Facebook
ReplyDeleteThe median annual pay during the Great Depression was 22% of the cost of an average home Today' it's 14%. That means that ay relative to home cost made it easier to buy a home during the Great Depression than right now. This is absurd.'
So...I had my doubts, so I ran the numbers myself. I came up with the Median wage vs home costs during the Great Depression at 29% and at 15% today. Our money, our wages, are worth significantly less during the Great Depression !! (Before anyone yells over a particular person or party...this didn't happen overnight or even just over the last 6 years) That means financially, it is almost 2x harder to afford a home compared to during the depression.
John also they were paid in real money. A 1-dollar face silver dollar has a melt value today (looking it up) 29.45
DeleteSo given the above "lower wages" and less housing percentage AND the massive increase of taxes since then... We EARN Less and get taxed more.
All good points, but still prices 'most' of us out of the market...
ReplyDeleteIn 1969 my buddy Gerald and I both got our Contractors License and built a bunch of 24X36 (864 sq ft) and 24X40 (960sq ft) (same floor plan) houses and sold them before they were even done. There was a hot market then. I don't remember the price but you couldn't buy a car with that now. ---ken
ReplyDeleteBought one of those when I was 19. Contractor bought a corn field, dozed it and put up 5 different facings but all were 1,009 sq ft with big yards. All for the princely sum of $9,300. $300 down and low monthly payments. This was 1961. Same house in 2003 sold for $140,000. I was surprised it was still standing. But the silver maple I planted first year was beautiful and still standing.
DeleteERJ, prices here in New Home 2.0 are running in the 600K-700K range for 3-4 bedroom houses. Not having to buy at the moment, we are carefully watching as the prices are slowly dropping.
ReplyDelete