Hacker News Reader

Comment by bdcravens | Hacker News Reader

I bought in 2022, and while it was new construction, it's a pretty mid-range house. No premium finishes, in a growing but small city northwest of Houston.

If you told me 10 years ago how much I paid for it, I'd ask what the name of my butler is.

View on HN

Indeed. My home "value" has roughly doubled in the last five years.

Sounds nice, but land/home values in the area I'd like to move to has nearly tripled in the same timespan.

I feel bad for renters priced out of the market, but many of us who have "enjoyed" the upside are actually deeply underwater relative to our preferences, to say nothing of the doubling of insurance premiums, and ~25% property tax hikes in the last five years.

> many of us who have "enjoyed" the upside are actually deeply underwater relative to our preferences

what do you mean by this?

Rising prices are great for people who want to downsize and terrible for people who want to upsize. Many millennials are “better off” than their peers having bought an apartment but can’t afford to move to a modest family home. The traditional housing ladder no longer applies.

What he said makes zero sense. Of course a more desirable area is going to appreciate faster. He’s acting like he should be able to trade his less desirable property for a more desirable one 1:1.

They bought a starter home for say 100k which is now 200k. But the family home they now want tripled in the same time from 200k to 600k. So even though they now have 100k more, they need 400k more for their desired house, while only 200k before (Numbers obvioulsy chosen randomly)

This still doesn't make sense because why would only homes on the low-end appreciate? If anything homes on the high-end should be appreciating faster because the people who live in them can afford to do more improvements.

I don't think you understood logic of original statement, although its clearly explained with matching numbers.

Btw those disproportional numbers can be easily real anywhere in the world even in much bigger ratios, I can confirm them from Europe - if you want to invest in properties, location is absolute top priority as we all know that. Those properties appreciate faster than average market, don't suffer much drops in crises, and of course are at most desirable locations for whatever reason.

It makes sense because both the starter homes and the larger homes appreciated. I'm not sure why you say "why would only homes on the low-end appreciate" when the example talks about two different classes of homes.

Yes, that's what I'm saying. The idea that you can trade up your starter home without getting lucky and having your starter home appreciate much faster relative to other homes is daft -- especially when home prices appreciate by percentages the gap is always going to get wider over time. I don't think there's ever been a time where this "starter home" pipeline has ever worked in general.

I think they were lamenting the fact that the classes did not appreciate at the same rate, and that the more desirable homes appreciated faster. Didn’t claim not to understand it either.

Property tax shouldn’t be going up with this tbh. If everyone’s housing and land is becoming more expensive, then you need to tax smaller %s to get the same budget.

To me this sounds like your city/state is just ballooning their budgets.

You don't need the same budget. You have to pay employees more to keep up with the rising cost of housing and land (or they all quit), so the budget has to go up too.

And... Look at California's prop 13 for what happens when property taxes can't rise with the market. People just keep their homes forever because they don't want to sell and buy a new place where the tax rate will ratchet up from the sale. We have multi-million dollar homes that are taxed as if they were $50,000 homes, starving the local area's schools and infrastructure of funding.

The local governments and school districts are hardly starving. School spending per student in California is above the national average. Property taxes aren't the only source of government revenue: we also have income tax, sales tax, and a wide range of other fees.

Proposition 13 did cause some distortions and needs reform. But it has at least been effective in stopping the former unchecked growth in local government spending and limiting the corrosive effect of public employee unions.

Why don't I see very many school busses in California?

The city or state can also put the extra $ in their rainy day fund.

I bought in 2021, a massive place but a complete refurbishment project. I am not done. I have no more money and no more willpower to invest more into this. I totally regret the purchase.

Cost of Constructing a Home- 2022 (NAHB) https://www.nahb.org/-/media/27E8E24FA6CB432CA4EF3D9C0249771...

Page 7 for AVG sale price: 2019: $485,128 2022: $644,750 AVG build cost: 2019: $296,792 2022: $392,241

I bought in the same exact area 10 years ago, this house was over 200k cheaper than it is now. There’s no way I’d be able to afford modern prices.

Reply on news.ycombinator.com