4 ms·
Houses can basically last an arbitrarily long amount of time and still remain functional. With most things, like a car, there is some nebulous end of life where
by pager86 10y ago
Houses can basically last an arbitrarily long amount of time and still remain functional. With most things, like a car, there is some nebulous end of life where its value is effectively $0, and the value of that thing will steadily decrease over time until it reaches that point. Because houses hold their value, people can sell houses when they don't need them, which makes it an investment. Of course value of housing and land change over time - the fact that there's a market ensures that - and of course people want to sell something for more than they bought it for if they are planning on selling. Housing as an investment is so intrinsic to its nature I don't see how to avoid it.
- chadcmulligan 10y agoI'm not sure if that's true - houses depreciate the same as cars. What does appreciate is the house on its location, often old houses go for land value, sometimes less if they haven't been maintained because you have to factor demolition costs in.
- WillPostForFood 10y agoI mostly agree with you, but want to note that there are exceptions to land appreciating. You can look at neighborhoods in cities like Detroit or Buffalo where the house and land have depreciated to almost nothing.
- maxsilver 10y ago> Houses can basically last an arbitrarily long amount of time and still remain functional. With most things, like a car, there is some nebulous end of life where its value is effectively $0, and the value of that thing will steadily decrease over time until it reaches that point. That's equally true of housing as well. Come on up to Michigan, I can walk you though entire neighborhoods filled with homes that are all functionally obsolete and valueless. Homes actually get worse -- a home can have negative value. If an empty lot costs $60k, it's not uncommon for a house on an equivalent lot to be only worth $50k, because it's assumed you'll have to spend $10k to properly demolish and dispose of the existing home before the lot becomes usable. In this scenario, the homes value is effectively negative $10k. Homes don't hold their value, land and zoning does. And with prices as crazy high as they are today, the actual home cost is almost an afterthought. I suspect if land and zoning actually became affordable, more people would opt to toss and rebuild their old homes with new modern ones, similar to Tokyo residential development.
- bluthru 10y ago>Houses can basically last an arbitrarily long amount of time and still remain functional. Not anymore. Contemporary houses only last about 40 years.