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Comment by hervature | Hacker News Reader

What these analyses normally miss:

- Building codes have changed. Things are much safer now than in the past. The chance of dying in a fire has decreased 1/4 since 1950 [1].

- Houses are much bigger. Houses have almost tripled in size [2].

- Quality of finishes have increased. People will probably debate me on this because things have generally gotten cheaper over time but that means that the expectation for a house now is quartz countertops and not vinyl.

- Desirability has changed. For example, the number of sports teams have tripled since 1950.

[1] - https://www.statista.com/statistics/526310/timeline-deaths-n...

[2] - https://www.ahs.com/home-matters/real-estate/the-2022-americ...

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I definitely agree that there's much more to housing prices than most simple analyses present.

Some food for thought in the other direction, though:

- Tools (e.g. nail guns, paint guns, concrete finishers, horizontal drilling for utilities, etc.) and materials (e.g. pre-engineered trusses) are significantly more efficient, so labor costs can be reduced which should drive pricing down. At least enough to offset changes in building codes, but likely more.

- Triple house size does not equal triple building costs.

- I would definitely debate on quality of finishes. Some might be better, but plenty is worse. For example, crown moulding is not as common (in my experience), and skirting is typically much cheaper, and I rarely see chair rails anymore. More often than not I see vinyl floors replicating wood instead of real hardwood floors.

The use of pneumatic nailers has substantially reduced the time required to frame a house.

Regarding labor costs and productivity, there is vastly more specialization in building a house now than there was in 1950. I suspect that in 1950 you only had a few types of skilled labor involved: carpenter, electrician, plumber, and maybe a flooring person (the flooring may have also been done by carpenter at that time). Now, there are additional specialties that need to be involved - roofer, concrete, HVAC, tile, countertop, appliance, etc.

They didn’t have roofers in 1950?

I don't know. I suspect that a good percentage of the roofing was probably done by carpenters at that time.

Efficiency gains only lead to lower prices if they are bigger than wage increases. And those are driven by efficiency gains of the rest of the economy. Sure you can gain here and there some wins, but in the end construction is still a very labor-intensive job.

The percent efficiency gain in labor when we moved from hammer & nail framing to nail gun framing significantly outpaced the percent wage increase framers experienced.

But yes, absolutely, you are right that there are many variables at play. Which is what my original post, and the person I replied to, were trying to convey.

Productivity in building construction has not improved much, according to data, even if tools have improved.

Even if tripling house size doesn’t literally triple costs, that is a straw man. It certainly must account for some of the cost increase.

>Productivity in building construction has not improved much, according to data, even if tools have improved.

What data are you looking at? I worked in construction (to be fair, industrial and commercial sector) for over a decade. Productivity rates changed quite a bit during the decade I was an estimator. I will dig up my productivity books from when I first graduated and compare to the last one I purchased (a few years ago) when I get home.

>Even if tripling house size doesn’t literally triple costs, that is a straw man.

A straw man? Even if labor only accounted for 10% of the cost of building a house (it is much more), changes to labor productivity absolutely affect the cost to build. Productivity rates are different for a new build of 1000sqft and 2000sqft. Not sure how that's a straw man?

Also, just to clarify, I'm not really presenting an argument. I agree with the parent comment that these maps/analyses aren't able to capture all of the variables. They gave some variables to consider when looking at the article data. I'm giving some others.

>It certainly must account for some of the cost increase.

I said it's not a 1:1 relationship, not that size didn't account for costs at all.

Also while houses are generally larger, lots are generally smaller, and often comprise the majority of the value.

Crown molding only it isn't common anymore because it isn't very desirable.

I wonder if we could do housing the Chinese way and just give people a concrete box to renovate (houses aren't sold new renovated in China, and you are expected to do your own re-renovation after you buy a house second hand), but that really hasn't helped housing prices over there very much.

>Crown molding only it isn't common anymore because it isn't very desirable.

Why it's not there doesn't really matter when we're talking about costs. If it's not there, you don't have to pay for it, end of story.

It doesn't mean it wasn't desired. It could have been replaced with something else even more expensive.

...What would you replace crown molding with that is more expensive?

The things you are pointing out are largely styling choices. The difference in quality of finishes are, like mentioned, solid surface quartz counters which are basically stain proof, large porcelain tiles, toilets that flush more effectively, low voc paints, engineered wood flooring that doesn’t warp and creak, etc.

I'm not quite sure I understand the distinction you're making. In construction terminology, at least, pretty much everything you can see or use is considered a "finishing material".

All of the things that I pointed out, as well as all of the things you point out, would be considered a "finishing material". Some are generally more high quality (e.g. counter, toilet) some are lower (e.g. vinyl flooring), some are no longer really bothered with at all (e.g. crown moulding).

My budget was around a million, idk if I saw a single home (sfh, Townhomes, condos) that had wood floors

How about two of the most cost impacting elements in home building, cost of labor and land?

If you asked me whether I would want to pay 5x more for a house that reduces my likelihood of dying in a fire from 0.00427% to 0.00104%, I think I would choose to roll the dice (and maybe DIY install a $20 smoke detector).

1950: 6,405 fire deaths / 150,000,000 US pop = 0.00427%

2022: 3,490 fire deaths / 335,000,000 US pop = 0.00104%

These are guesses but I think the main reduction in fires from 1950 to 2022 are:

a) better electrical wiring and circuit provisioning. Overloaded outlets or circuits were more common in the 1950s. Fuses could also be tampered with more easily than circuit breakers.

b) Matches everywhere. You had matches in the kitchen for lighting the stove, and around the house for lighting cigarettes. "Kids playing with matches" was a common cause of fires. You don't hear about that nearly as much today.

More points:

Basically everything is soaked in flame retardant: your insulation, your wiring, your furniture, your appliances.

Heater technology is way safer now. Central heat is a lot more prevalent, and space heaters are a lot less likely to start a fire.

I'd also add to your wiring point: electrical appliances are way safer and way less hot.

A counter-argument though is the prevalence of lithium-ion batteries. I do wonder if a spike in fires is coming--though I would've expected it by now.

> I do wonder if a spike in fires is coming

Arguably came and left. In the early 00s battery pack explosions in cell phones wasn't a super rare event. Now Li batteries are a lot safer with better protections to keep fires from starting. Additionally, the biggest batteries someone is likely to setup for their homes are LFPs which are quiet resistant to starting fires. If sodium batteries are successful they'd go even further in being a non-issue.

c) Smoking

In 1950 around 50% of adult males smoked, these days it is closer to 15%

Why tie it to half the population (in an ideal world)? Just list per capita.

A good number of females also smoked, so the overall percentage of adults was higher than that.

"Smoking in bed" was such a common cause of fires that even in elementary school we were taught "never smoke in bed."

And why they have to be lined with retardants

I think that many rural homes were still in the process of getting electricity around 1950 and that there were some that still used kerosene lamps for lighting.

Also improvements in medicine might matter

Death is not the only negative outcome of a house fire.

Death is a well tracked statistic and a severe and fairly distinct outcome. Other statistics might not be as available or accurate.

Similarly the murder rate is a more accurate than other crime rates. Burglaries, muggings and assaults are often not reported to police whereas violent deaths almost always are.

Sure, I agree.

Gred's post however strongly implies that the only outcome worth considering is death. That might be true for them, but I'm not sure if that applies broadly.

Speaking from experience, losing your house to a fire is traumatic, expensive, and you lose things that can't be replaced. Even when there are no deaths.

No but eating McDonald’s or drinking alcohol kill more yet we do it anyways

How is this related to the conversation? I'm not sure what point you're making.

The point is the risks of health/economic issues from home fire is something most Americans would gladly have for reduced housing price.

Are you sure it's a 5x difference in material?

Like, a big reason for fires in the 50s was paper covered and underspeced wiring.

Safe wiring simply uses plastic instead of paper.

> Houses are much bigger. Houses have almost tripled in size [2].

I know the numbers support this but I always wonder why my observations are so different.

When growing up (I'm Gen X) all my friends houses and mine were pretty big. Most of us were lower middle class so these were cheap houses. Land was dirt cheap so houses used the space and still had huge yards. Houses were simple, but spacious.

By the 90s houses had shrunk, since now land was quite expensive so builders had less space.

All the construction going on right now in my town is even tinier, since land prices have skyrocketed, so builders have the incentive to stuff as many tiny units into tiny plots as possible.

So, where are these 3x larger houses these days?

I just had this conversation with my grandmother today. She was describing her own grandmothers house- and how huge it was. The large bedrooms, a whole room dedicated to the telephone even! The way she described it, it was a straight up mansion.

I was curious what this house looked like, so I asked the address. Looked it up on Redfin. It was less than 2400sq ft. The house she was standing in and comparing to was twice that size.

Older homes had more usable space, so they felt larger. They could fit 4-5 bedrooms in 2400 sq ft or less.

Care to explain where you think the space went?

The big houses are REALLY big. And, while I can find a small apartment, new homes under 2000 sq ft are tough to find. The house I grew up in was 1500 sq ft and plenty for a family of four. I wish I could own a 1100 or less sq ft home but they’re all very old

I suspect that something has changed in the way square footage is calculated. Perhaps there are more finished basements or something. I was very involved in several moves my family undertook when I was younger. I feel like I got a good sense for home sizes. Many of the ones listed for 3000 sq ft. today look more like the 2000 sq ft. houses from yesteryear.

I also think about Louis Rossmann's quest to find a NYC storefront for his repair business a few years ago. He brought a laser measure with him, to document how the actual space squared with advertisements. I don't know that he ever found a place that wasn't lying. Yes, New York and, yes, commercial, but I wouldn't be surprised to see similar tactics in place for residential, across the country.

Almost all of the middle class tract homes built in California (for example) in the 60s/70s are around 1200sf. They also used cheap materials, had no insulation, maybe 2 bathrooms but often 1.5, very simple kitchens, etc.

The stuff that people buy now are much bigger and much more luxurious even at the bottom end.

Looks like normalizing to price per sqft might make the price flat at least in some parts of the US? I always debate with my brother, an architect, why people consider an 80-sqm apartment big enough for a family of 4 (Europe), but wouldn’t aim below 150 sqm when considering a house.

Much of the US housing stock includes homes built before 1990 (30 years ago). If most of the median home price increase was due to build quality there would be a bimodal distribution of housing appreciation with newer homes having appreciated more than older homes.

Most of the appreciation in housing is due to higher household incomes due to two income households.

I would change your last sentence to: is due to higher household incomes due to two income households without a similar increase in the supply of housing near where jobs are.

Why bimodal? Houses are being built every year. So maybe houses built in 2023 have appreciated 1% more than in 2022, and those have appreciated 1% more than 2021, and so on, leading to a smooth distribution.

sorry what do you mean by saying "Desirability has changed. For example, the number of sports teams have tripled since 1950." ? I am like not American and I do not get how that is related to housing

If I understand correctly:

Houses near desirable locations (e.g. sports stadiums) are more expensive. There are more of those desirable locations now (more sports teams = more sports stadiums). So the average is driven upwards even with no change to the housing itself.

Is living near a sports stadium really that desirable? I lived a few blocks from the Giants stadium in SF, and I'll never make that mistake again.

Running a 15 minute errand on a game day could take hours. It was impossible to get my car out of the garage or get on/off the highway. The food/trash left on the streets was terrible too, which made walking my dog a PITA instead of a pleasure.

I think the point is that if you live in an American city with a professional sports team, you’re living in an area that offers way more than just a sports team; there are many things of note to do within a 20mi radius.

People who choose to live, say 250mi from the nearest major professional sports team are going to have a ton less job opportunity, things of note to do, but will generally have a lot less to pay because no one else wants to live there.

Ah that makes more sense, thank you! I wasn't looking at it as a proxy for surrounding development, but now I can see why that might be a more nuanced metric than just region size/population.

>Is living near a sports stadium really that desirable?

For me? Absolutely not, haha. But I'm sure it is for others. I have no idea what the average American would say.

Yeah, it's the sports stadiums and not where the paying jobs are. KISS. People want to be comfortable and secure. To be secure you need wealth. To be wealthy you need a high paying job. To get a high paying job you need to live in an urban center. To live in an urban center you need to compete with millions of other like-minded, capable individuals.

If the market was flooded with options nobody would be talking about housing prices. People don't give a single thought about sports stadiums or if you're near a highway/airport or any of that soft nonsense. People are hard: they want a big house that isn't damaged on a nice plot of land above the flood plane where they don't spend 3 hours a day commuting to their job.

>Yeah, it's the sports stadiums and not where the paying jobs are

Who said that?

>People don't give a single thought about sports stadiums or if you're near a highway/airport or any of that soft nonsense.

You might not, but other people definitely do. It's common for people to have criteria when looking for a house (e.g. not having an airport or train station directly in your backyard, being near a good school, being close to x and y amenities, being on a main bus line, etc.). They don't go to a real estate agent and only say "I want a house". Being close to work is a starting filter. Most people apply more filters.

Stadiums were just an example of what people might consider desirable. I think the broader point hervature was making was that what is considered a desirable location (and the cost of being near those locations) has changed in the last 70 years. That is an effect on housing prices which is not clearly captured in the article's analysis.

That conclusion assumes there are options when there are not. There are millions of people priced out of secure housing. People buy what they can. There's no reason to hunt for patterns in noise.

I don’t think it is causative at all. The statement sounds like an AI hallucination. But this is testable. You do probably see some gentrification in the immediate area but you also have the negative externality of parking…

Sure, I have no idea. I was just trying to interpret what the parent poster said.

Not only an increase in square feet, but an even bigger increase in square feet per person.

Yes exactly - my parents and inlaws had homes 2x the size of what they grew up in, and also had half the children their parents had.

Indeed. Growing up in the 80s -- in a fairly middle class family -- a lot of my friends had bunk beds.

Now "living wage" calculations assume that every child has their own bedroom.

Let’s go further and:

- take the average household size in 1950 vs 2020 to calculate median house price per person in a household

- then take the average square feet per person and find out what % it has increased in the past 75 years

Then layer those stats on top of the inflation adjustments to hopefully remove some of the confounding factors?

I think this is likely a distortion caused by zoning regulations, resulting in "missing middle" housing.

Basically, if you are only allowed to build single family housing on a plot of land, it doesn't make sense to build anything other than a large luxury home.

The size of a single person has also increased. Considerably.

> Things are much safer now than in the past.

I wonder, should arguments like this be used to justify the issue? With technological advancements things should become better (i.e. safer in this case) without raising inflation-adjusted costs. Wouldn't it be very similar to saying that processors should have become more expensive because they became faster or hard drives because they have larger capacity? Additional costs built into the new codes should decrease over time as builders become more efficient at implementing them or technological advancements allow them to become more efficient.

Not every safety item is necessarily an extra expense due to inefficiency. The simplest example would be electrical wire. 2 lead, paper insulated aluminum wire is less expensive than 3 lead PVC insulated romex, regardless of manufacturing efficiency. There's not a lot of modern AL electrical wire for price comparison, but Home Depot lists a 1000ft spool of #2 AWG USE-2 AL wire from Southwire for $0.80 / foot. The same spool from the same manufacturer in CU is $2.32 / foot. So while not a perfect comparison, if you imagine going from a 1950's 2 wire AL situation to a 2024 3 wire CU situation, you're talking a baseline price increase of over 4x with modern efficiency. And that's before you consider that modern building codes also require many more outlets and circuits than they used to. My home, built in the 70's has 3 circuits in the kitchen. 1 counter top, 1 fridge, 1 range. IIRC the modern building code is 1 circuit for every hard wired appliance, 1 for the fridge, 2 accessory circuits and a circuit for the room walls in general. If you assume a modern house with a fridge, range, dishwasher and over the range microwave/hood combo, that's 7 circuits minimum for the kitchen. So in addition to the 4x increase in wiring costs for the existing circuits, you also have a 2x increase in the number of circuits for just that room let alone outlet spacing requirements in other rooms and the like.

How much of the dying in a fire decrease is just because of decreased smoking, and the use of smoke alarms though?

This can't be it, much of the housing stock is from pre 1950s and adding those finishes or code improvements does not make a house 5x as valuable.

My theory is that we simply don't allow building anywhere near the rate of increasing demand, which is reflected by the anemic supply growth compared to population increases.

My grandmother compiled a book of letters from families in my hometown that she gave all of the grandkids a copy of before she died.

One of the letters talked about how common fires were and how the standard practice was to just pull up a chair in the middle of the street and watch it burn.

- Surface-level "finishes"

- Square-footage-maximizing floorplans, with a 3-foot wide lawn that your HOA still wants in pristine condition

- "Open floorplans" so you can listen to the roar of your dishwasher, washer, and dryer from the comfort of your living room (is it cheaper to get rid of interior walls and doors?)

- Mandates to use more-fireproof sticks and boards, and non-carcinogenic insulation

- Incremental improvements in the technology of home appliances, no thanks to home-builders

I hate that's the sum of "progress" in housing quality. I wish more expensive homes meant something more than extra bedrooms with the same race-to-the-bottom construction and townhouse-level neighbor-separation as the next development.

It would also be interesting to see the numbers relative to mortgage rates and availability. It looks like the 1950's had mortgages starting around the 5% range, but that steadily increase to a peak of near 20% in the 80's before dropping through the 90's and bottoming out around 2.5% in 2021. Along with that I imagine qualifying / getting a mortgage in 1950's was more difficult than modern times with 0% down first time home buyer loans.

It's a valid and good point, but it's also important that there is very often no other option available in new construction.

When the zoning/permitting process limits the building of new houses, builders are going to build what gives them the biggest return: large, luxuriously finished houses.

> builders are going to build what gives them the biggest return: large, luxuriously finished houses

In a lot you could build one largish luxurious home and sell it for 1.5 to 2.0M

Or do 8 tiny townhouse units and sell each for 800K for a total of 6.4M

I don't see how the single home will ever be more profitable if a builder is doing it.

We're seeing a lot of these 8 townhomes per lot (4 on each side with small driveway in between) popping up everywhere, precisely because it maximizes profit per lot for the builder.

You can't do the 8 tiny townhouses if that isn't permitted.

Many zoning codes prohibit building even a duplex in a "single family home" area.

Maybe this is starting to change in some areas.

Exactly that: you've got a limited number of lots and a limited number of units that can be on those lots, so max the value of those units. With the lot supply and zoning, that equals replacing whatever might already be there with a giant McMansion. This drives up housing prices while also deleting the middle out of the market.

> that equals replacing whatever might already be there with a giant McMansion

That's the opposite of what we see around here. Developers buy houses from the 1940 to 60's (big houses on big lots), tear them down and build an 8-pack or 6-pack (depending on lot size) of tiny townhomes.

The only people building large houses are wealthy individuals building for themselves (as opposed to a development company building to sell) because they can afford to take the potential-profit hit and just build what they want.

Yup, it's entirely down to zoning.

Exactly, the single home will only be more profitable because the townhomes will never be allowed to break ground in many neighborhoods in the US.

The luxury finishes are high margin..

Houses are bigger, but seem less thoughtfully designed with a lot of useless space that seems to be there to maximize the sq. footage to justify high prices.

Hard no. I've been going to many open houses and there is a strong trend towards more functional layouts over time. The 1940s houses might have a large number of square feet, but the % of that taken up with unusable walkways and narrow rooms is much higher than things built later. 1960s era is better, 1980s better still, and best of all are new builds.

Median cost per square foot might be more informative.

I disagree, each marginal square foot is not equivalent. (Access to owning the first few hundred over zero are in particular market is very important!) I think overall housing supply vs overall demand is still a useful way to look at it, because it captures how we're under building cheap housing.

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