4 ms·

According to the CPI inflation calculator, The Classic home from 1916 for $918 would cost $22,282 today. That's actually quite a bit less expensive than the sa

According to the CPI inflation calculator, The Classic home from 1916 for $918 would cost $22,282 today. That's actually quite a bit less expensive than the same size houses being offered by Menard's today, by about a factor of 2. I don't have any good insight as to why the cost would actually be higher today after 100 years of productivity gains. Productivity has increased by about a factor of 5, so all other things being equal the same house should cost only $4400 today. What gives?

ip26 8y ago
Labor costs have increased faster than average, i.e. faster than the index. The houses you can buy today also have more going on behind the walls. Nobody had an R-60 attic in 1918.
colonelpopcorn 8y ago
The catalog price of the home is just for the materials, though, isn't it? It's not taking into account real estate, legal, administrative, or labor costs. Those are probably what's driving housing cost more than anything these days. I imagine you could get just the materials necessary to build the Classic home for around that much.
brixon 8y ago
Has the main material costs changed (also assuming the material is the same, but it is likely different). Stricter building codes likely change what makes up the building which will likely add costs. Did the early ones have electricity or plumbing?
- tptacek 8y ago
  Yes.
greeneggs 8y ago
I'm not sure where you are getting your numbers, but the construction industry has long had notoriously slow productivity growth. In the US, labor productivity in construction has stayed essentially flat since 1947, and decreased since its peak in 1968. "Reinventing construction: A route to higher productivity", McKinsey Global Institute (2017) (pdf, see page 23): https://www.mckinsey.com/~/media/McKinsey/Industries/Capital%20Projects%20and%20Infrastructure/Our%20Insights/Reinventing%20construction%20through%20a%20productivity%20revolution/MGI-Reinventing-construction-A-route-to-higher-productivity-Full-report.ashx https://www.mckinsey.com/~/media/McKinsey/Industries/Capital...
- fallingfrog 8y ago
  My numbers are very very approximate and come from eyeballing the following graph, which was the best I could get from a google search: https://images.slideplayer.com/27/8913519/slides/slide_9.jpg https://images.slideplayer.com/27/8913519/slides/slide_9.jpg
- legitster 8y ago
  I don't think construction is the applicable industry.The kit itself would be a manufactured good - you are adding the construction yourself.
83 8y ago
I imagine it's a lot cheaper to build houses when you don't have to worry about pesky things like building code, fire code, gfci outlets, or plumbing.
legitster 8y ago
Assuming they use the same amount of material for each (it's hard to guess, on one hand modern houses are bigger and have more features, on the other hand older houses generally use much more substantial lumber) here are some ideas: - I imagine the modern kits come with a lot more detail work already done. - Raw lumber was very cheap back in the day while they were still cutting down virgin forests. - The market of self-made homes was much bigger and allowed for larger economies of scale and competition.

ip26 8y ago

Labor costs have increased faster than average, i.e. faster than the index. The houses you can buy today also have more going on behind the walls. Nobody had an R-60 attic in 1918.

colonelpopcorn 8y ago

The catalog price of the home is just for the materials, though, isn't it? It's not taking into account real estate, legal, administrative, or labor costs. Those are probably what's driving housing cost more than anything these days. I imagine you could get just the materials necessary to build the Classic home for around that much.

brixon 8y ago

Has the main material costs changed (also assuming the material is the same, but it is likely different). Stricter building codes likely change what makes up the building which will likely add costs. Did the early ones have electricity or plumbing?

tptacek 8y ago
Yes.

greeneggs 8y ago

I'm not sure where you are getting your numbers, but the construction industry has long had notoriously slow productivity growth. In the US, labor productivity in construction has stayed essentially flat since 1947, and decreased since its peak in 1968. "Reinventing construction: A route to higher productivity", McKinsey Global Institute (2017) (pdf, see page 23): https://www.mckinsey.com/~/media/McKinsey/Industries/Capital%20Projects%20and%20Infrastructure/Our%20Insights/Reinventing%20construction%20through%20a%20productivity%20revolution/MGI-Reinventing-construction-A-route-to-higher-productivity-Full-report.ashx https://www.mckinsey.com/~/media/McKinsey/Industries/Capital...

fallingfrog 8y ago
My numbers are very very approximate and come from eyeballing the following graph, which was the best I could get from a google search: https://images.slideplayer.com/27/8913519/slides/slide_9.jpg https://images.slideplayer.com/27/8913519/slides/slide_9.jpg
legitster 8y ago
I don't think construction is the applicable industry.The kit itself would be a manufactured good - you are adding the construction yourself.

83 8y ago

I imagine it's a lot cheaper to build houses when you don't have to worry about pesky things like building code, fire code, gfci outlets, or plumbing.

legitster 8y ago

Assuming they use the same amount of material for each (it's hard to guess, on one hand modern houses are bigger and have more features, on the other hand older houses generally use much more substantial lumber) here are some ideas: - I imagine the modern kits come with a lot more detail work already done. - Raw lumber was very cheap back in the day while they were still cutting down virgin forests. - The market of self-made homes was much bigger and allowed for larger economies of scale and competition.