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It absolutely raises the “floor” of the housing costs - more materials simply means more costs. And the labor to do extra work means more costs - and quality la
by vineyardmike 3y ago
It absolutely raises the “floor” of the housing costs - more materials simply means more costs. And the labor to do extra work means more costs - and quality labor is much more expensive today. Same reason a bigger house means more costs.
I would posit - admittedly without data - that outside of major metros where land is the clear dominant cost, most costs for housing increase is labor.
There are houses and empty lots available within 15min of downtown Cleveland that are selling for <50k. If you go up to $100k, there are dozens of houses. They’re all empty lots or houses that need renovations. If you want a new construction in the same neighborhood, it’s $300k. The cost difference is labor or materials.
Obviously Cleveland is a cherry-picked example but I used to live there so I picked my old neighborhood. San Francisco, Boston, Seattle, etc are obviously mostly driven by land costs due to demand and very high incomes.
- paulryanrogers 3y agoHaving worked near these neighborhoods the value you put in would be at a high risk. It's very possible you'll be assaulted, your home will be robbed, and the market value won't match the renovation costs. All that said, some parts are gentrifying. Though mostly where developers can get large enough plots.
- vineyardmike 3y agoYea for sure. I lived near there for a short while (in school) and have some friends in the area still. The point is that most of the cost of these homes are labor - even when land is nearly free (<50k in a city), you can’t get a “cheap” home that’s made to modern standards. If the land is free, there is no demand and high supply, but the house is expensive- it’s labor or materials driving the cost.