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> When you make housing an investment, by definition, it has to become less affordable in the future. Sadly this has become a meme response, always repeated in

by jjav 5y ago

> When you make housing an investment, by definition, it has to become less affordable in the future. Sadly this has become a meme response, always repeated in every housing topic. Can we dig deeper? What would it mean? A house has value, one can live in it, a basic human need. It also takes raw materials and skilled labor to create. Both of those go up over time, so building an identical house in the future will nearly always cost more than today. Thus, that house can't help but appreciate in value. At a minimum, with inflation. Even that makes it a decent investment with minimal risk. So you propose a house should depreciate? How, exactly? And would you want to live in those conditions? One way to have housing depreciate is to have the economy of the region collapse (e.g. Detroit). But clearly that's not a good solution. Maybe another way is to build houses with such bad quality that they disintegrate before the mortgage is paid off. But that's not an attractive solution either, I don't want to live in such a structure. So what exactly are you proposing?

persedes 5y ago
The value of a House does depreciate, especially when not taken care of. Even then maintaining comes with significant costs. You have repairs like water heaters, plumbing, roof, painting, hvac l, kitchen, bathrooms, floors, the list goes on.. that are due eventually. Next older homes are much less energy efficient,had to adhere to different building standards or might've been built in a style that does not appeal anymore. Plenty of reasons why a home should not increase in value,just because. Where this becomes really irksome to me is for rentals. Unfortunately most landlords do the bare minimum with regards to upkeep (financially this just makes the most sense I bet), but they can easily upsell it to the next investor, if they're in a good area.
- jjav 5y ago
  > Plenty of reasons why a home should not increase in value,just because. It's not just because. It is because the cost of a brand new identical house is higher in the future (more expensive materials, higher labor cost), so that will pull up the value of the existing comparable houses. Older houses are often more attractive so may price above the new ones. The new house comes pretty bare (unless it is a luxury builder but then you're paying that premium), often with zero landscaping etc. An established house gets you a nice yard, mature trees, etc.

by jjav 5y ago

persedes 5y ago

The value of a House does depreciate, especially when not taken care of. Even then maintaining comes with significant costs. You have repairs like water heaters, plumbing, roof, painting, hvac l, kitchen, bathrooms, floors, the list goes on.. that are due eventually. Next older homes are much less energy efficient,had to adhere to different building standards or might've been built in a style that does not appeal anymore. Plenty of reasons why a home should not increase in value,just because. Where this becomes really irksome to me is for rentals. Unfortunately most landlords do the bare minimum with regards to upkeep (financially this just makes the most sense I bet), but they can easily upsell it to the next investor, if they're in a good area.

jjav 5y ago
> Plenty of reasons why a home should not increase in value,just because. It's not just because. It is because the cost of a brand new identical house is higher in the future (more expensive materials, higher labor cost), so that will pull up the value of the existing comparable houses. Older houses are often more attractive so may price above the new ones. The new house comes pretty bare (unless it is a luxury builder but then you're paying that premium), often with zero landscaping etc. An established house gets you a nice yard, mature trees, etc.