The Housing Investment Paradox

[Captain Snooze]

Originally Posted by Irace86.2.0

Part of that is because it is more lucrative to build the biggest home on the smallest lot than building a small home on the same size lot.

This is a relatively new suburb close to where I live and I'm not suggesting this is anything close to a rare case.

Things to note.
The carport isn't counted as part of the house so one can build the maximum size house allowed on the block then add to that by building the biggest garage you can.
Also, the number of house with light coloured roofs is incredibly low. Not so much a problem in winter but come summer you will pay for air conditioning.
There is no space for trees along the street. This plays a significant part in ambient temperatures in summer. How is this for amusing. Actually, it's not funny at all. Some councils in Sydney have set up public cool shelters because people's homes can't be stayed in during the hot part of the day. Their new houses aren't safe because of high temperatures.

This is modern, relatively inexpensive housing and it is endemic.

[soundman98]

lol, brand new house, and they can't cool it?!? that's ironically funny to me

[Captain Snooze]

Originally Posted by soundman98

lol, brand new house, and they can't cool it?!? that's ironically funny to me

"As energy prices rise due to the war in Ukraine, a survey of how people cope with hot weather by the community-based Sweltering Cities found a majority (61.8 per cent) said concerns about cost stop them turning on their airconditioner."

“The idea that cheaply built housing is affordable housing is a lie. All it means is the costs aren’t being paid by developers because the financial, the environmental and the health costs are being paid by the residents and the community,” Bacon said.
(Different article from the one above.)

[Irace86.2.0]

Originally Posted by Captain Snooze

This is a relatively new suburb close to where I live and I'm not suggesting this is anything close to a rare case.

Things to note.
The carport isn't counted as part of the house so one can build the maximum size house allowed on the block then add to that by building the biggest garage you can.
Also, the number of house with light coloured roofs is incredibly low. Not so much a problem in winter but come summer you will pay for air conditioning.
There is no space for trees along the street. This plays a significant part in ambient temperatures in summer. How is this for amusing. Actually, it's not funny at all. Some councils in Sydney have set up public cool shelters because people's homes can't be stayed in during the hot part of the day. Their new houses aren't safe because of high temperatures.

This is modern, relatively inexpensive housing and it is endemic.

I may be missing the point of your post, especially as it ties into what you quoted, but I’ll try to respond.

I was mentioning the phenomenon of how house lot sizes are the same or smaller than older homes, yet the homes are far larger. Single story homes that are under 1500 sqft are much more rare to find in new construction post 1980’s in many areas. Obviously land is proportionally more expensive than the homes in California, so large homes on small lots is trying to maximize the real estate for the space, but large homes are still far more expensive than smaller homes, and along the same lines, small duplexes, triplexes, etc, townhomes and condos are cheaper to cool than single family homes, yet they keep building R1 housing. Cheap can mean multifamily, it can mean smaller, it can mean cheaper materials be like no crown molding or granite countertops or stainless appliances or whatever, but it doesn’t have to mean poor insulation and poor build quality. Prefabs and 3D concrete homes and other novel building innovations could make homes cheaper to build, but ultimately, not if the builders still want to build the largest home on the lot to maximize profits.

[soundman98]

the construction industry is also pretty slow to adopt any new standards. especially when it potentially gets rid of any trade.

3d printing is a nice idea, until the carpenters union gets involved.

starting to see a lot more pre-fab stuff for the spec houses though.

[Irace86.2.0]

Low taxes, low interest and high debt spending inevitably leads to periods of high growth , but then there are market corrections and slow growth, as the market pays off those debts and consumption goes down. With inflation high due to an influx of higher wages post pandemic to allure back workers and higher minimum wages and from some other higher costs related to the deficits in the supply chain, consumer confidence and spending is down. Feds are correcting the inflation with higher interest rates, all of this nullifies the gains in wages. Rich get rich. We should see a drop in housing, but with low supply and slow housing development, prices may not correct as far as they should.

Redfin’s chief economist says the housing market correction has begun—and things are going to get worse before they get better

Better for whom? Sellers? People wanting equity to flip? Buyers either pay high prices or high interest rates. Personally, I would rather pay high interest rates because my property taxes would be lower for a cheaper house, and I could probably guarantee being able to refinance in 5-10 years at a much lower rate.

https://fortune.com/2022/07/03/redfi...dictions-2022/

US Consumer Sentiment Slumps to Record Low on Rapid Inflation

https://www.bloomberg.com/news/artic...inflation-woes