2007/05/23

The Real Estate Picture Is Rosy

...well maybe not for all of America, but certainly here at the BlognonyPAD.

Am I talking about appreciation on this closet-sized flat I call home? No, not really. Though Sodom by the Sea hasn't seen the deflation of much of the rest of the nation, who knows what the future holds. Oh sure, we'll probably do OK...some day, but the plain fact is that the Frogette and I probably won't stay here forever. The cost of living is just too damn high.

So that brings me to my point: USA Today notes that 'McMansions' are becoming the housing of choice for American families which, ironically, are shrinking. Yes indeed, the average US home has increased in square footage to a whopping 2400, with many exceeding even that cozy size. 3 car garage? No problem. TV room? Media room? Jai-alai court? Sure! If you want it, they will build it.

But I've never lived in more than 1300 square feet, and my current place is not even that large--thank heavens for good closets. 1400 square feet would be a mansion to me. 1600? A palace! So while America convinces itself that it needs 5 bedrooms and a banqueting hall, I'll be looking for that perfect little bungalow that I can settle into for the duration.

Now don't any of you go filling the empty-nesters heads with any of that "downsizing" nonsense.

22 Comments:

The thing is, bungalows are hard to find as people are tearing them down and building McMansions. Then when there is one or two bungalows left in the neighborhood, the McMansion people get together and file a complaint that the bungalow people don't fit in with the style of the neighborhood. This is just crazy. It's happening in my neighborhood.
I think they are ugly and have no character. And hey man, I just wouldn't want to have to clean one of those monstrosities. Give me a bungalow any day. I don't care what the Jones' are doing.
Peacechick... It's true, but I think the situation is better in neighborhoods where the lots are small...or narrow. Inner cities, where I prefer to live anyway, seem to keep more of the "old stock" of homes. At least I hope it stays that way.

Mary... EEK! You are so right. 4000 sq. ft. of dusting! You'd have to use furniture covers for the "wings" of your house you don't go into.
I want a "bonus room". I just love the sound of that word "bonus". Throw in a billards table, an HDTV and a sub zero fridge...ok, time to stop dreaming. Funny thing is, in most new home models in my area the bonus rooms are the largest rooms in the entire house - shows you what our real priorities are.

Hey Kvatch - are we going to launch a Kommando offensive this weekend for Memorial Day?
kvatch, you wrote:

"...Sodom by the Sea hasn't seen the deflation of much of the rest of the nation..."

What deflation? The nonsense of a crisis in housing prices is a media creation.

Houses are not stocks and bonds, which are continuously priced. Houses are priced only at the time of sale. Moreover, the real value lies in the land, not the house itself. Thus, you can be absolutely sure that prices in San Francisco will only rise over time.

San Francisco homeowners benefit from land scarcity. But, unlike New Yorkers, they don't benefit from building up. Re-zoning land to permit taller buildings or multi-unit construction adds value to land occupied by single-family homes. Nevertheless, SF property will always gain value.

Meanwhile, the USA Today article is yet another silly exercise in journalistic lunacy.

The article identifies Utah as the largest site of 4-bedroom homes. Wow. Mormon country and bigger houses. Wow. Of course the journalist makes the basic math mistake that almost all journalists fall for.

He claims Utah has the highest PERCENTAGE of 4-bedroom homes. Big deal. In fact, the NUMBER of 4-bedroom homes in Utah is LOW compared with other areas.

I have no doubt the NUMBER of 4-bedroom houses in the NY suburbs -- excluding NY City -- is higher. And those suburbd fill an area far smaller than the state of Utah.

Meanwhile, the ding-dong journalist tries to paint a picture of unbridled excess when he says "...up from one in six in 1990, despite shrinking families and increasing costs for construction and energy."

News flash. New houses are far more energy-efficient than old houses. I know. I've got a 100-year-old 6-bedroom house in Brooklyn. Despite the 6 bedrooms, it's not a big house. The bedrooms are small. But the energy costs are high.

Meanwhile, the price of existing homes reflects the price of construction. Thus, no matter what route you follow -- new construction or existing house -- the cost of your home will reflect all the variables of the housing market.

Moreover, the size of the average American home may be increasing. But New York City has entire neighborhoods of brownstone row houses with 5 and 6 bedrooms. These homes were built a century ago.

My neighborhood in Brooklyn is a century old. I believe every house has at least 5 bedrooms. Some have 8.

The article stated:

"All those big suburban houses require more land, more materials to build and more energy to heat and cool, Markham said."

This statement is false. However, builders are tearing down small houses and replacing them with larger houses. On the same plot of land. Meanwhile, the new houses are likely to require LESS energy to heat and cool compared with what they replaced. Old houses frequently lack insulation. They often have lousy windows, old inefficient furnaces and heating systems.

The article also states:

""Excess is a matter of how each person views their own life," Markham said. But, she added, "Each person today is taking up more resources, more land, more energy than generations before.""

False. There are 300 million people in the US today. Today, we live on exactly the same amount of land that we lived on in 1964 when the population hit 200 million.
i want a mansion too. but mine will have to fit inside my tiny studio apt here in nyc. if you're that determined, you can always move to alaska's back country.
Ah no_slappz...where would I be without your daily dose of reality.

What deflation? The nonsense of a crisis in housing prices is a media creation.

[sigh]... 4.9% increase in the last year (SF), 3.2% decrease in California statewide (much higher in a few areas), but you're right...not sure about the rest of the nation.

Nonetheless, I can always count on you to attack the link but not the post (well other than for going after me personally, that is). This post is really more about right-sizing one's own expectations and my observation that, for a couple such as the Frogette and I, the real estate picture looks pretty rosy, as it would for anyone with a good bead on their needs.

Pull the head, and read between the lines a little.
RAFFI... Don't joke about that Alaska thing. I've got a brother-in-law who did just that.

Comandante... I didn't even think about it--been way busy lately, but you're right we need to do something. I'll do a post on Kommandos this evening, get the ball rolling.
A larger house in exchange for putting your soul on lease for the next 20yrs.

I think I too will enjoy my closet for a while.
I can't downsize. My living room is my dining room is my bedroom is my computer room is my family room.
That "McMansion" picture looks almost exactly like a funeral home we have here in the area that I pass on the way to/from work every day.

Except the funeral home is single-story. But all the columns and frou-frou are the same.
Oh - is a "Bonus Room" what they used to call a "Rumpus Room" back in the Perfect 1950's?
Aaron... No problem in long term debt, as long as it's within one's means. I think that these new mortgage metrics allowing up to 50% of your gross income toward housing just so you can afford another 1000 sq. ft. are ludicrous.

Tomcat... So you're basically saying that you live in a catbox? ;-)
looks almost exactly like a funeral home we have here in the area ...

Sewmouse... I does a bit, doesn't it? Maybe it is.

Perhaps the McMansion of future will be a multi-generational home complete with family cemetery plot out back. Mortgages are certainly headed in the multi-generational direction.

"Bonus room". "Rumpus room". No matter how you slice it's a room you probably don't need.
no joke, alaska is probably the most pristine, serene, and naturally beautiful state in our country. i wonder if igloo mansions exist?
I have a one bedroom condo - 713 square feet. Really good kitchen, though.
RAFFI...pristine, yes! But where am I gonna get a really good martini? ;-)

Diva... A good kitchen is almost as necessary as good closets, but if I had to pick one...
I covet a 1300 sq ft CLOSET. Does that make me evil? I could store my skinny, medium & fat wardrobes PLUS a hybrid in there. Better?

News flash for Slappy: people in Utah don't use all those bdrms for sleeping. After the kids & grandkids are gone, they turn them into "craft rms" (don't ask), "gun rms" (don't tell) and "food storage rms" (keeping walmart sales high is a utah code). ~~ D.K.
Nope. A catbox is bigger than my place. ;-)
d.k. raed wrote:

"News flash for Slappy: people in Utah don't use all those bdrms for sleeping. After the kids & grandkids are gone, they turn them into "craft rms" (don't ask), "gun rms" (don't tell) and "food storage rms""

News flash for d.k. raed -- empty nests are not unique to Utah Mormons.
I'm thinking along the same lines as Peacechick Mary up there....
I'm thinking of down-sizing my bed, and replacing it with that Japanese thingy that you fold onto a shelf during the day...
Not only are beds huge space wasters, they're not that cheap to build, require regular maintenance and are noisy when you have "female visitors" over.

Add a comment

Links to this post:

Create a Link