Comment by gpapilion | Hacker News Reader

Comment by gpapilion | Hacker News Reader

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I’ve thought about this a lot. My parents had 2 TVs in a house of five(and one was junk). We had stick on vinyl floors, and a cheap white appliances. Counter tops were linoleum, and we had 1.5 baths. I cut the lawn, and we went shopping in stores. We took two vacations requiring planes for the first 13 years of my life. Most vacations were camping. We rarely went out to eat. We didn’t have computers. We had 1 corded phone in the house.

This is in stark contrast to my house. We have two iPhones and get new ones every 2-3 years. We have two iPads, 3 computers, and gadgets galore in a house of 4. My countertops are stone, my appliances are stainless. We go on vacations yearly that require planes and hotel, and used to eat out often. I have a house cleaner, and pay for an expensive gym.

I realize I may not have the house my parents have, but I have nicer things. I make more money but I spend it very differently then they did. There was basically nothing we bought that compares to an iPhone every 2-3 years. I know so many people who travel regularly, and don’t seem to realize this was rare 15 years ago. I really feel we spend our money differently.

I mean it sounds to me like you're just wealthier than your parents were, but housing has risen in price disproportionately and so the things you buy are different. Would you really be purchasing a house if you didn't buy a phone every 2 years? The things you list sound like, idk, $10k/year with some heavy assumptions mostly weighted on the vacations than the tech. It's likely true there's more premium goods at (higher) affordable prices, but that doesn't actually contradict the narrative that housing has gotten a lot more expensive.

I say this as someone in the same boat, who could/would/will casually afford to buy an expensive home under 30.

The median net worth of millenial families (35 and under) is $10k. Probably trends negative if you filter down to people below age 30 only.

I think that people ignore the fact that the population of the United States has dramatically increased over time. We now have 331 million people whereas there were only 210 million in 1970. So of course housing is going to be more expensive. The issue gets even more dramatic prior to 1900.

The USA has half of a continent to house all these hundreds of millions. The problem is with overcrowding in larger cities, not the lack of space (even if the location is suboptimal).

NOne of us should feel compelled to crowd into large cities anymore. NOT in the 21st century, and CERTAINLY not after we've clearly demonstrated as a workforce that we can very easily get our jobs done remotely. Sure, that's not for all workers, or even most, but a huge proportion of us could very easily move to small towns all across america to relieve the crowding pressure in cities or the most trendy suburbs.

IF and ONLY IF: employers join us in the 21st century, and embrace remote work where they can.

(and the real danger, as I learned in the 1990's, is not even being remote - it's being "not at the home office" of a distributed organization - it is a career killer, and when that "business cycle" inevitably hits, your remote-office workers are always the first to get cut. This shit has to stop if we're going to get out of this "crowded into cities" nightmare).

My takeaway from his or her comment was that housing is expensive because it’s nicer.

And it’s true. It is hard, if not impossible, to find a modest, small house. The median size of new construction is more than double what it used to be. And houses are full of glitzy appliances, fixtures, moldings, and counters. It really does just heavily inflate the price.

How much would a 1,000 square foot house with modest fixtures cost in your neighborhood, if it existed? That’s what the typical house used to be.

Eh, not really

> It is hard, if not impossible, to find a modest, small house.

True, but small condos have seen similar appreciation

> houses are full of glitzy appliances, fixtures, moldings, and counters. It really does just heavily inflate the price.

This do increase the price of real estate, but not that much relative to the bigger picture. The price of a "glitzy" fridge vs. a non glitzy fridge is going to be what, $500? $1,000? Likewise, appreciation has occurred on older properties without these features unless you're below the inflection point where the risk of the property declining in value faster than the market appreciates is so high that the price remains poor.

A sizable percentage of people don't want to live in condos. And they aren't necessarily small, either.

>This do increase the price of real estate, but not that much relative to the bigger picture. The price of a "glitzy" fridge vs. a non glitzy fridge is going to be what, $500? $1,000?

That's an extreme understatement. A glitzy refrigerator might only had $500 but marble counters might add $20,000 or more. Same with flooring. The price difference on a house full of stick on vinyl and real hard wood might be an additional $20,000. Then you get to other cosmetics such as crown moldings, jacuzzi tubs, walk in showers, vaulted ceilings, heated towel racks, and more. You could take the exact same house structure, and through flooring, counters, and cosmetics alone you could easily jack the cost up by $60,000.

>Likewise, appreciation has occurred on older properties without these features

Not really. Houses get upgraded with better floorings, better counters, additions, and other renovations. Go find a house in your neighborhood built in the 1950s with no major additions, laminate counters, and cheap flooring. Good luck.

> A sizable percentage of people don't want to live in condos. And they aren't necessarily small, either.

Most condos are small. If a sizeable proportion of people don't want to live in condos, that would make them cheaper. The fact that they're appreciating similarly that is further evidence that the premium for size is not the driver of what's happening.

> That's an extreme understatement. A glitzy refrigerator might only had $500 but marble counters might add $20,000 or more. Same with flooring. The price difference on a house full of stick on vinyl and real hard wood might be an additional $20,000. Then you get to other cosmetics such as crown moldings, jacuzzi tubs, walk in showers, vaulted ceilings, heated towel racks, and more.

Most properties don't have jacuzzi tubs or vaulted ceilings. You're not wrong, but they're not relevant to the discussion of what's happening to the median home buyer.

It's nonsensical to think that the price of housing has risen primarily because of quality increases because many, many houses have seen large appreciation with no changes.

> It's nonsensical to think that the price of housing has risen primarily because of quality increases because many, many houses have seen large appreciation with no changes.

So it should be absolutely no problem for you to take me up on my offer. Locate a home, built in the 50s or 60s, without any additions adding square feet. Cheap counters, cheap flooring, and cheap fixtures. If what you say is true this should be relatively simple.

How much is it, and how much more or less expensive is it than newer construction in the area. If homes are just rapidly appreciating while they sit there unimproved, this should be a trivial exercise.

My parents bought a 1400 sqft, 1950s-built home in 1993 for $350k. It still has all old appliances such as a 1950s oven that looks like this [1], old gas heating vents, no central cooling, no pool. No additions. The fixtures and flooring aren't cheap, but they're not luxurious, and are over 60/70 years old at this point - only real maintenance they've done is re-shingling the roof and repaving the driveway every decade or so.

The house is now worth $2.1M (+500% gain). Obviously if they sold a new buyer would tear the whole thing down and build some huge modern home on the land (which is the actual valuable portion of the asset) as has been happening in their neighborhood.

You are placing way too much importance on the relatively small value of fixtures and "nice" amenities vs. the global glut of capital chasing appreciating assets (made much easier through online platforms) such as land in desirable areas.

[1] https://www.oldhouseonline.com/.image/c_limit%2Ccs_srgb%2Cq_...

We spend it differently because supply and demand (yeah, duh), but what I mean is that we make about the same as our parents, but the cost of housing went up, while the cost of travel and electronics went down. So we buy cheap stuff while try to figure out what to do with housing (and healthcare, and so on).

Everything that requires local labor is very expensive (partly because our expectations and requirements increased, we are willing and able to spend more, so a very high equilibrium point formed), everything that can be mass produced is cheap. (And not just because externalities are hidden, but because technological progress.)

Your countertops or your landlord's countertops? Because all the rest - all those iphones & vacations - is cheap fluff, really.

That's the point. The cheap fluff today was expensive stuff yesteryear, if it existed at all.

Seems like the ol' "poor people aren't really poor because they almost all have refrigerators and not even kings had refrigerators two hundred years ago!" argument.

The counter to your strawman is that you are poor if you feel poor.

Since we have proven that a majority of people feel poor (i.e. they need to earn 20% more), and that this is true even of millionaire’s, we need a different definition of poor, because something isn’t right here...

Yeah, because real poverty doesn't exist in this country right? It's all just about feelings!

https://www.theguardian.com/us-news/2017/sep/05/hookworm-low...

> The average income is just $18,046 (£13,850) a year, and almost a third of the population live below the official US poverty line. The most elementary waste disposal infrastructure is often non-existent.

> Some 73% of residents included in the Baylor survey reported that they had been exposed to raw sewage washing back into their homes as a result of faulty septic tanks or waste pipes becoming overwhelmed in torrential rains.

I call the counterargument "You can't live on pepper". As in even though pepper is way cheaper than it was 500 years ago, you'll starve if that is all you can afford.

A good thing is still a good thing. And for the vast majority of Americans, we aren't talking about starvation, or even homelessness.

With tens of millions of Americans facing food insecurity and tens of millions of Americans facing eviction now, thanks to years of precarity exacerbated by the COVID-19, I think the situation is worse than you're suggesting.

I’m not sure how cheap that is overall. For example an extra $400 a month is $100k in mortgage loan right now. It all adds up, and is easier to do if you avoid the wasteful spending.

This is an excellent point - I think we are definitely a generation of consumers, and what happens is, kids who aren't taught how debt works get caught up in it.

And once you're caught up in debt that extra 400 doesn't go to a mortgage it goes to that credit card or that high car payment on a 72 month term..

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