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Comment by kingsuper20 | Hacker News Reader

Great article.

It would be interesting to compare the US to Japan and Japan's tendency to favor new construction (plus the differences in features and styles).

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> It would be interesting to compare the US to Japan and Japan's tendency to favor new construction

You make it sound like these are opposing views but doesn't the US also heavily favour new construction?

In the US and Japan I understand that a new build is seen as attractive and the best option for people with money to do it?

If you want a real contrast, in the UK new build is seen as the worst option, for people without any money. People with money in the UK buy old houses. The older the better. I would literally never buy a new-build in the UK unless I had no other option whatsoever. I'm saving up to upgrade to an older house here.

> but doesn't the US also heavily favour new construction?

I don't know if my view reflects the majority, but around where I am from, older and even historic homes are the crown jewels because they were built before the race to the bottom occured in construction -- namely cheaper, thinner walls, smaller usable space, etc. Older homes are built with old growth lumber, and often come with thicker plaster walls and better layouts.

> I don't know if my view reflects the majority

It doesn't. For example this article expressing surprise:

https://www.bloomberg.com/news/articles/2021-04-26/previousl...

Even the term 'previously owned' for a house is baffling to UK ears. Of course a house is previously owned. Why would you be building your own?

I have never seen a home listed as previously owned. In the US, homes are by default assumed "previously owned" unless specifically advertised as new. And only the very well off tend to demo and build fresh. Most people will remodel and add in to existing structures.

> I have never seen a home listed as previously owned.

Ok but Bloomberg have.

Yeah, but I concur with the gp: I've never seen the phrase "previously owned" applied to housing; it sounds made up. Listings either specify "new construction" or it's assumed that the house is currently occupied.

And older structures have much less insulation, compared to the present building code, as put forth in the so called International (actually US) Residential Building Code, adopted by most states.

Energy use for heating and cooling is typically much higher in older buildings, over a lifetime of decades.

I don't know about building codes, but I know a 1900 house built from foot-thick stone is better insulating that anything we build today.

I have never seen a building from that era with foot-thick stone, you have to go back further for that here in Canada.

The century homes here in southern Ontario are double-wall brick with beefy 2x4 framing within the interior wall, then lath and plaster, and no insulation.

My 1930s UK house is foot-thick stone and brick on all walls, even internal. It doesn't have insulation except in the attic because it's one absolutely massive heat-sink mass - by the time it's warmed up from the summer it's already autumn and then it starts emitting the heat usefully instead.

That's the way to build, in my opinion.

Thermal mass as a tool is so very under utilized. When it's considered, it's often only on a 24hr cycle. As you point out, the 365 day cycle may be even more important. For a modern take (with for realz engineers and measurements even) have a look at Drake Landing community in southern Alberta. https://www.dlsc.ca/

edit: They've discontinued the 'Current Conditions' part of their website but I followed it with some regularity in the early years

I can't argue with your personal experience, but I pay less to heat a 17 year old, 3300 sq. ft. house than I did a 900 sq ft one that was built in 1950.

Insulation matters, especially when you have temperature swings from 100F in the summer to -25F in winter.

I think we need to settle on a description of "older" here. I do not consider a house from 1950 to be from the old generation of builders, but starting to be what was the budding mass building trends. The 1950s featured dirt cheap energy (also ironically, the US relied on renewables more in the 1950s than today), and so there wasn't much thought put into proper insulation because running your AC or heat all day wasn't that costly.

I consider older homes to be built in an era where HVAC either didn't exist or wasn't the norm, so they were designed as such -- thicker materials, proper airflow, and ample use of shade, even considering the house orientation relative to the sunrises and sunsets in the summer to ensure the primary living quarters would be out of direct sunlight the most amount of time.

Older homes are usually well thought out in terms of natural cooling and heating. Being that many of these homes were built in an era where HVAC systems didn't exist, they can stay remarkably cool in the summer, and warm in the winter. They designed the homes to have proper airflow throughout the house (and underneath the house), and of course, shade from trees. So while their energy efficiency rating may be lower -- in how it can retain the heating or cooling put out by the HVAC, in practice, you don't use your AC or Heat as much as you would in a newer home (which for some reason new home builders seem hellbent on eliminating all trees, and placing the entire home in direct sunlight)

My house was built in 1927, and it stays ~75-78 even on a hot summer day, and due to the much thicker materials used, doesn't bottom out past 60 in the winter.

No. Nimbys have been in control for decades and only starting to lose their grip. In our city most folks are trapped in shitbox two story apartments from the sixties, that are now being renovated into luxury-light because supply is so highly constrained.

Older mostly exists on the east coast with a few exceptions.

> shitbox two story apartments from the sixties

Literally not sure if you consider these old or new-builds for the purpose of this conversation?

I'd call anything post 1950 'new-build'.

New means now or recently.

Populations grow, so expecting everyone to live in homes from a century ago simply won't work.

> or recently

Right but 'recently' is relative. To me 1960s is recently. That's when people started building 'modernly'. But I guess not for you?

In Australia, before 1940s or so might be "character", 1960s might be "conventional" (said generally with distaste) and recent/new might be 2005+. Character houses are usually improved (with a matching or contemporary extension) and conventional houses are often demolished.

Character example with contemporary reno but garish fitout (antlers!): https://www.realestate.com.au/property-house-sa-highgate-136...

Conventional - you can see from the second photo being a top-down, they expect people to buy and demolish: https://www.realestate.com.au/property-house-sa-clapham-1364...

New build on half a block - common here to buy, sub-divide the block, and build two semi-detached or two-storey homes: https://www.realestate.com.au/property-house-sa-myrtle+bank-...

If modernly is cheaply, yes 1960s.

If modern is dual pane windows, proper insulation, mixed use, multiple stories... this is still quite rare in California and only allowed to become common in new buildings ten years ago due to nimbys blocking any new development.

It's not that we particularly favor new construction; it's more that we have a lot of empty land. Most new houses are going up on land that was either unused or farmland previously as opposed to having to demolish an existing house and rebuild on the plot.

In Japan, my understanding is that it's common to tear down a perfectly good home and build a new one on the site. That pretty much never happens in the US.

From what I've seen in residential Tokyo, houses are usually one offs built when the owner buys the land. And look, at least superficially, to be similar construction methods to American construction rather than European: i.e. wood framing as opposed to masonry/concrete.

Maybe some of it is prefab, but given the narrowness of roads, I wonder.

You are correct. The SFHs in Tokyo are usually built roughly similar to stick-built (slightly post-and-beam, but walls are load-bearing). Wood can be precut to length, but they are constructed on-site.

I’ve read that build quality in Japan is significantly lower due to the depreciating nature of houses as an asset and the bias toward building new.

Seems like it's a self-reinforcing cycle: houses are built lower quality, people thus don't value older houses, so builders build lower quality to lower "new" cost

https://www.theguardian.com/cities/2017/nov/16/japan-reusabl...

With few exceptions, houses are a depreciating asset just about everywhere; it's only land that appreciates. Japan is no different except that the depreciation rate of the house may be somewhat faster, and appreciation of the land significantly slower than in other countries.

I'm not sure this is accurate. I purchased my house in 2004, and it's currently valued at $349K (purchase price $199K). The lot itself sold for $40K in 2003.

Looking at available lots in my neighborhood, they average about $70K for my house size. So that means my house itself is valued at $280K.

So yes, the land has appreciated by $30K (over 18 years), but the house itself has appreciated $120K in the same timeframe. The land appreciated at roughly 3% per annum, while the house appreciated at roughly the same rate.

Of course this doesn't include any improvements, or maintenance costs associated with the house.

By "improvements" do you mean sewer hookups and so on? Japan is no different in that those add value, and they don't redo them when rebuilding the house (barring some problem).

Also, depreciation of the house includes things like maintenance costs -- did you spend money on your roof? Redo the wiring? Renovate the kitchen? Unless they're intended as a teardown, old houses are often sold post-renovation, and that investment can counter the depreciation but won't show up if you just compare the selling price against the price of the bare lot.

Lastly, it sounds like if your lot is $70k and houses are $350k, maybe construction costs have gone up a lot in your area since 2004. That could cause an old house to appreciate by increasing the cost of new houses.

By improvements, I meant things like finishing out a basement (thus adding more usable sq footage), kitchen/bath remodels, decks etc.

Maintenance, at least in my area isn't a large cost over the life of a house. In the last year we've replaced a roof ($8K), furnace/AC ($9K), and the water heater ($800). The water heater we've had to replace twice before, so in total we've had roughly $20K in maintenance costs since we purchased the house. We're getting to a point where we need to repaint both inside and out, and replace some carpet. Probably around another $10K for that. So $30k in maintenance over 18 years is pretty small potatoes.

I don't know that construction costs have gone up much more than the inflation rate; I do know that material costs have gone up in the last 18 months, but that should drop back down to "normal" in another year or so.

So would your house sell at a premium relative to a buying the land and having a new house built? If so, it's definitely appreciated, but that sounds like a very uncommon scenario!

It's hard to say. I don't know the permitting costs in my city, nor the costs for water/sewer hookups either. My house is nice, but nothing special for the area. Assuming a $125/sqft cost, a house like mine would be around $225K plus the lot ($70K) for a total of $295K. The only thing I've seen that might have helped the house appreciation is the completion of an elementary school in our neighborhood.

This would be generally true in Australia. Land value for 700sqm where I live is $700k. An older character house or luxury/new build would add value, but almost anything else would have minimal value. A house on a typical block seems to rise in value faster than a unit (say, one of 6-8 on a block) where land is a smaller part of its valuation and redevelopment potential is wrapped up with the wider group.

I admire the Japanese presence for building new because it means that the owners build the house they want rather than build for what the imaginary buyer 20 years in the future would want. So many people here in the states have nonsense houses for their family situation because their eye is incessantly on resale appreciation value.

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