8 ms·

I would argue that housing is not a good investment, but owning land is. The house is transient... the land remains.

j4yav 6y ago
It doesn’t have to be. I live in a house in the Netherlands that was built in 1675, and this isn’t terribly unusual. It’s not a special old house or anything, just an old one in an old city center. I know it’s not super common in the US for various reasons, but it’s certainly possible to build a house that will outlast you, your children, and their children.
- chrisco255 6y ago
  Wild, how was it constructed out of curiosity and what materials?
  - j4yav 6y ago
    Timber and brick, I’m unfortunately not an expert on home construction and can’t give a more interesting answer but maybe someone else around knows. A lot of homes and construction in the New England area is brick and I bet it will last quite a long time.
    - psalminen 6y ago
      Can confirm. I know many people who live in New England houses ~150 years old.
      - jefftk 6y ago
        This is mostly not a matter of construction materials. The oldest houses in New England are all wood frame (much cheaper for the colonists, still is today). As long as you keep the wood dry (maintain the roof and siding), it will last indefinitely.
      - RHSeeger 6y ago
        My in-laws' house is from around 1750, and it's not unusual in New England.
    - mikeg8 6y ago
      To piggy back: "timber framing" uses 6x6 or larger posts and beams for the structural members of the house and then is cladded over with brick, mud, or other materials to keep out water and air. Although we use still use wood (timber) studs in the form of 2x4s/2x6s, this is usually referred to as "stick framing" because the boards are much smaller. These smaller framing members require more fasteners to hold on claddings ie siding, vapor barriers, etc which means each nail/screw penetrations allows water and air to potentially ruin the house. Stucco and other masonry cladding like brick are naturally porous and water permeable. Another interesting tid-bit is that while older houses are much draftier and usually less energy efficient, this "airiness" of the house allows them to dry out and avoid rotting. There have been countless class action lawsuits in the US because builders in the 80s and 90s created situations where exterior wall assemblies trapped water against the studs and didn't allow them to dry out in an effort to make the "air tight" and energy efficient. The brick cladding on old New England style homes either have an air barrier between the brick and wood framing or weeps holes in the mortar to allow water out from behind the brick. This allows them to last much longer.
mikepurvis 6y ago
This is true at a most fundamental level, but the things which make land valuable can absolutely change over time, in terms of its presence-in or proximity-to various other things (cities, amenities, natural resources), or ways that it is maintained or let go over time (soil erosion, pollution). And of course, there are a lots of factors which are totally outside of the individual's control— a falling aquifer could make digging a usable well prohibitive, for example, or maybe your land is on the coast of Florida and will be underwater at high tide in another few decades.
asperous 6y ago
1. Most valuable land have buildings or housing on it already so it’s kind of inseparable. 2. There’s plenty of reasons land can lose value: people moving away, economic, environmental (climate change), cultural changes. Population growth is projected to peak in 2070. 3. (Land appreciation - inflation) has to be higher then property taxes at least. There’s also opportunity cost of not using that money to buy another investment instead. Related: https://www.frbsf.org/economic-research/files/wp2017-25.pdf https://www.frbsf.org/economic-research/files/wp2017-25.pdf
wvenable 6y ago
Most land where I live is significantly more expensive that the houses built on them. Almost without fail when the property changes hands, if the house isn't brand new it's torn down and replaced. Doesn't matter if it's a perfectly fine house because the relative cost is so different.
hourislate 6y ago
I would assume you don't have a house in Toronto or any of the major Canadian cities like Vancouver, Montreal or Ottawa. Houses there rise in price by 2-3,4,5 k a week easily. You can purchase a house for 1.5 million (borrow 1 million at 1.9 %) and sell it in 10 weeks for for at least 30-50 k more. You ask how long can this last? It has lasted for a couple of years at least. I have seen the prices of Condos in a Co-op I was watching almost double in 3-4 months from 320k to 600k.
- tylerhou 6y ago
  On average, this is not true. Citing this example is like looking at a specific stock (TLSA) and saying that the entire stock market quadruples every year. Looking at the broader picture, most REITs give returns similar the S&P 500.
  - hourislate 6y ago
    >On average, this is not true. While you might be correct looking at other markets, you would be surprised how average it is for Canadian Housing prices across Canada. It is impossible to not to earn a minimum of 20 % on any Real Estate transaction withing a year. It is very possible with a little luck to almost double your money on certain purchases in a very short time. I understand how difficult this is for people outside of Canada to understand but I'm not making shit up, it is reality and there is no limit to what the Gov will do to make sure it continues.
    - SketchySeaBeast 6y ago
      I think you're making a "Toronto and Vancouver is Canada" fallacy, which is ironically a very Toronto stereotype. Here in Alberta it's not so hot.
      - alex_c 6y ago
        Golden Horseshoe population is 9 million, Vancouver area is another 2.5 million. It's not Canada, but it's a big chunk of Canada.
CameronNemo 6y ago
What is land? Governments sell land rights piece meal. You might own the development rights to the land, but you still have to worry about zoning. And I would be surprised if there is anywhere in the US where you can buy land with exclusive water rights (underground or creeks/rivers). Water rights are almost always shared in some way. Mining (oil or ore) rights are not usually lumped in with development rights either. So if you buy land without a house, what are you buying? Future development rights? All the while you have to worry about squatters...
JMTQp8lwXL 6y ago
Land can be transient. Beachside communities are having tough conversations right now about this topic. In California the mean high tide line is where beachfront property legally ends. But the mean tide is moving inward every year. There are parts of California that will need to retreat in the next 100 years; properties have already been condemned.

It doesn’t have to be. I live in a house in the Netherlands that was built in 1675, and this isn’t terribly unusual. It’s not a special old house or anything, just an old one in an old city center. I know it’s not super common in the US for various reasons, but it’s certainly possible to build a house that will outlast you, your children, and their children.

chrisco255 6y ago
Wild, how was it constructed out of curiosity and what materials?
- j4yav 6y ago
  Timber and brick, I’m unfortunately not an expert on home construction and can’t give a more interesting answer but maybe someone else around knows. A lot of homes and construction in the New England area is brick and I bet it will last quite a long time.
  - psalminen 6y ago
    Can confirm. I know many people who live in New England houses ~150 years old.
    - jefftk 6y ago
      This is mostly not a matter of construction materials. The oldest houses in New England are all wood frame (much cheaper for the colonists, still is today). As long as you keep the wood dry (maintain the roof and siding), it will last indefinitely.
    - RHSeeger 6y ago
      My in-laws' house is from around 1750, and it's not unusual in New England.
  - mikeg8 6y ago
    To piggy back: "timber framing" uses 6x6 or larger posts and beams for the structural members of the house and then is cladded over with brick, mud, or other materials to keep out water and air. Although we use still use wood (timber) studs in the form of 2x4s/2x6s, this is usually referred to as "stick framing" because the boards are much smaller. These smaller framing members require more fasteners to hold on claddings ie siding, vapor barriers, etc which means each nail/screw penetrations allows water and air to potentially ruin the house. Stucco and other masonry cladding like brick are naturally porous and water permeable. Another interesting tid-bit is that while older houses are much draftier and usually less energy efficient, this "airiness" of the house allows them to dry out and avoid rotting. There have been countless class action lawsuits in the US because builders in the 80s and 90s created situations where exterior wall assemblies trapped water against the studs and didn't allow them to dry out in an effort to make the "air tight" and energy efficient. The brick cladding on old New England style homes either have an air barrier between the brick and wood framing or weeps holes in the mortar to allow water out from behind the brick. This allows them to last much longer.

mikepurvis 6y ago

This is true at a most fundamental level, but the things which make land valuable can absolutely change over time, in terms of its presence-in or proximity-to various other things (cities, amenities, natural resources), or ways that it is maintained or let go over time (soil erosion, pollution). And of course, there are a lots of factors which are totally outside of the individual's control— a falling aquifer could make digging a usable well prohibitive, for example, or maybe your land is on the coast of Florida and will be underwater at high tide in another few decades.

asperous 6y ago

1. Most valuable land have buildings or housing on it already so it’s kind of inseparable. 2. There’s plenty of reasons land can lose value: people moving away, economic, environmental (climate change), cultural changes. Population growth is projected to peak in 2070. 3. (Land appreciation - inflation) has to be higher then property taxes at least. There’s also opportunity cost of not using that money to buy another investment instead. Related: https://www.frbsf.org/economic-research/files/wp2017-25.pdf https://www.frbsf.org/economic-research/files/wp2017-25.pdf

wvenable 6y ago

Most land where I live is significantly more expensive that the houses built on them. Almost without fail when the property changes hands, if the house isn't brand new it's torn down and replaced. Doesn't matter if it's a perfectly fine house because the relative cost is so different.

hourislate 6y ago

I would assume you don't have a house in Toronto or any of the major Canadian cities like Vancouver, Montreal or Ottawa. Houses there rise in price by 2-3,4,5 k a week easily. You can purchase a house for 1.5 million (borrow 1 million at 1.9 %) and sell it in 10 weeks for for at least 30-50 k more. You ask how long can this last? It has lasted for a couple of years at least. I have seen the prices of Condos in a Co-op I was watching almost double in 3-4 months from 320k to 600k.

tylerhou 6y ago
On average, this is not true. Citing this example is like looking at a specific stock (TLSA) and saying that the entire stock market quadruples every year. Looking at the broader picture, most REITs give returns similar the S&P 500.
- hourislate 6y ago
  >On average, this is not true. While you might be correct looking at other markets, you would be surprised how average it is for Canadian Housing prices across Canada. It is impossible to not to earn a minimum of 20 % on any Real Estate transaction withing a year. It is very possible with a little luck to almost double your money on certain purchases in a very short time. I understand how difficult this is for people outside of Canada to understand but I'm not making shit up, it is reality and there is no limit to what the Gov will do to make sure it continues.
  - SketchySeaBeast 6y ago
    I think you're making a "Toronto and Vancouver is Canada" fallacy, which is ironically a very Toronto stereotype. Here in Alberta it's not so hot.
    - alex_c 6y ago
      Golden Horseshoe population is 9 million, Vancouver area is another 2.5 million. It's not Canada, but it's a big chunk of Canada.

CameronNemo 6y ago

What is land? Governments sell land rights piece meal. You might own the development rights to the land, but you still have to worry about zoning. And I would be surprised if there is anywhere in the US where you can buy land with exclusive water rights (underground or creeks/rivers). Water rights are almost always shared in some way. Mining (oil or ore) rights are not usually lumped in with development rights either. So if you buy land without a house, what are you buying? Future development rights? All the while you have to worry about squatters...

JMTQp8lwXL 6y ago

Land can be transient. Beachside communities are having tough conversations right now about this topic. In California the mean high tide line is where beachfront property legally ends. But the mean tide is moving inward every year. There are parts of California that will need to retreat in the next 100 years; properties have already been condemned.