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Also, the size of new homes has risen from 1600 in 1973 to 2600 today. It's not like all factors remain the same. You can drive through old neighborhoods near m

by zip1234 10y ago

Also, the size of new homes has risen from 1600 in 1973 to 2600 today. It's not like all factors remain the same. You can drive through old neighborhoods near me with 1000 sq ft houses that sell for $40k because nobody wants a house that small. I'll bet a lot of the homes being built in Palo Alto right now are not small.

khuey 10y ago
There are very very few homes being built in Palo Alto right now.
devonkim 10y ago
Elizabeth Warren addresses this trend in a paper showing most homes' square footage went up to add a second bathroom in comparison to the middle of the century. The cost of labor to add a bathroom and the raw cost of the materials in relation to that low cost house is probably also not worth it either because if we're talking $40k houses I would heavily bet that the property is in an area with no non-minimum wage jobs within reasonable commute distance nor retirees that need income.
notadoc 10y ago
A 1200sq ft 3 bed 1 bath ranch in Palo Alto today costs about $1.8 million, they're all over zillow and sell quick too.
0xcde4c3db 10y ago
> You can drive through old neighborhoods near me with 1000 sq ft houses that sell for $40k because nobody wants a house that small. How closely have you looked at those $40K houses? I've seen a handful of sub-$100K smaller houses listed in my region, but they're wrecks; they'd need a massive amount of work to get anywhere near the comfort and safety level of a modern, well-maintained house. They're basically the house equivalent of buying a $500 car.
maxsilver 10y ago
> You can drive through old neighborhoods near me with 1000 sq ft houses that sell for $40k because nobody wants a house that small. Sure, but a $40k house will need anywhere from $90k to $160k worth of additional repairs to be safe to inhabit. And since that cost isn't in the equity, most people in most areas can't qualify to finance that. (A $200k mortgage is not identical to a $40k mortgage and $160k reno loan).
gohrt 10y ago
Assuming the lots are the same size, which they generally are in many areas (lots are resold), a 60% increase in house should be ~60% increase in price, not 4x or 10x. > 1000 sq ft houses that sell for $40k > because nobody wants a house that small a 1000sqft house in Palo Alto would sell for >$400K just for the land. It would be a "teardowns", and a $40 house+lot would be converted to a $300k 2600 sqft houses -- quite reasonable, so the explanation lies elsewhere (access to employment, entertainment, educations?)

by zip1234 10y ago

khuey 10y ago

There are very very few homes being built in Palo Alto right now.

devonkim 10y ago

Elizabeth Warren addresses this trend in a paper showing most homes' square footage went up to add a second bathroom in comparison to the middle of the century. The cost of labor to add a bathroom and the raw cost of the materials in relation to that low cost house is probably also not worth it either because if we're talking $40k houses I would heavily bet that the property is in an area with no non-minimum wage jobs within reasonable commute distance nor retirees that need income.

notadoc 10y ago

A 1200sq ft 3 bed 1 bath ranch in Palo Alto today costs about $1.8 million, they're all over zillow and sell quick too.

0xcde4c3db 10y ago

> You can drive through old neighborhoods near me with 1000 sq ft houses that sell for $40k because nobody wants a house that small. How closely have you looked at those $40K houses? I've seen a handful of sub-$100K smaller houses listed in my region, but they're wrecks; they'd need a massive amount of work to get anywhere near the comfort and safety level of a modern, well-maintained house. They're basically the house equivalent of buying a $500 car.

maxsilver 10y ago

> You can drive through old neighborhoods near me with 1000 sq ft houses that sell for $40k because nobody wants a house that small. Sure, but a $40k house will need anywhere from $90k to $160k worth of additional repairs to be safe to inhabit. And since that cost isn't in the equity, most people in most areas can't qualify to finance that. (A $200k mortgage is not identical to a $40k mortgage and $160k reno loan).

gohrt 10y ago

Assuming the lots are the same size, which they generally are in many areas (lots are resold), a 60% increase in house should be ~60% increase in price, not 4x or 10x. > 1000 sq ft houses that sell for $40k > because nobody wants a house that small a 1000sqft house in Palo Alto would sell for >$400K just for the land. It would be a "teardowns", and a $40 house+lot would be converted to a $300k 2600 sqft houses -- quite reasonable, so the explanation lies elsewhere (access to employment, entertainment, educations?)