Home Values.

In reply to BoxheadTim:

You are correct. There are a lot of reasons construction techniques and prices vary in many parts of the country and the world.

I spent 10 years working with HfH doing appropriate technology development worldwide, which is the understanding of the locally available cultural and historical needs, costs, and locally available resources. It is essentially understanding why houses are built differently in different places, how the occupants will live in them, and what are the best sustainable methods to address those needs.

I could spend a lot of time explaining the reasons buildings differ.

I am just saying that the initial assertion that US houses are insanely low even when compared to 3rd world countries is not really that accurate.

SVreX wrote: "Both" was a reference to both Africa and the "stan regions of the former Soviet Union", not "both" of the "stans".

You do have me there.

But this:

SVreX wrote: and the "Stans" are not generally considered third world.

Is wrong. Not in context, not grammatically, but factually. Afganistan, for example, is generally considered a third world country (by the modern, non-Soviet definition). There's no forest, no trees, just Afghanistan, Kazakhstan, Kyrgyzstan,Tajikistan,Turkmenistan, and Uzbekistan all being generally regarded as third world countries.

In reply to SVreX:

Oddly enough we've had that discussion on the German expat forum I'm on. There is also a cultural difference that affects both the way a house is built and its perceived value.

As somebody on that forum mentioned half jokingly, if you build a new house in Germany (which still happens all the time), societal norms more or less dictate that you build it such that the next three generations of your family can live in there, and you're never ever supposed to live in another house, but leave the one you built in a pine box.

In the US, it's much more acceptable to move around, so the average home ownership term is much shorter and houses are much more of a commodity than they are in places like Germany.

Plus of course if you don't have any space to just expand, you just build on what's already there. My mother's house in Switzerland is supposedly built on a medieval foundation and is most likely a couple of hundred years old, if not older. The church burnt down around 200 years ago an they lost the property records back then, so it's not quite clear how old the house really is. But whoever rebuilt it the last time around certainly tried to ensure that it would last a long time - that house is going to outlast me comfortably, plus most likely the kids and grandkids I don't have. But that's how the local mentality dictated the house should be built, and these days you can pick them up for less than a McMansion.

mguar wrote: However I believe you're missing the thrust of this whole discussion.. In most of the rest of the world the home you own is far more expensive than here in America.. Generally to 99% of Americans their home is the most expensive thing they own and takes the majority of their income.. Let's assume that's true in most of the world shall we? Gas is also far more expensive (in most of the world) cars are about as expensive (in most of the world), food is more expensive (in most of the world) Taxes are higher (in most of the world) So what are we Americans doing wrong? (well, could do better more efficiently?)

Americans on average enjoy a higher standard of living for less expense than citizens of most other countries. I wouldn't call that 'doing it wrong' - if anything, that would be 'doing it right'.

I'll bite: how do you save 50% on your house?

The person who said "location, location, location" is 100% correct. I could move my house 5 miles in one direction and it would lose 50% of its value. Move it 5 miles in another direction and it would increase in value 25% of the value as a knock-down.

Dec 9th I just closed on a 3/2 that is 7 miles from downtown Pittsburgh for under $52k. The kicker is that its on over an acre of land.

I don't have any worries about return on my investment

mguar wrote: I might add I'm in a similar if wildly different situation.. That is my home was appraised at 2.3 million.. (in 2007) Most recently the same home was appraised (for tax purposes) for slightly over $600,000 yet three houses away is a new never occupied home that recently dropped it's asking price to a little less than 3 million form the 4.5 it had been at.. (similar sized home slightly bigger lot) I'm the one driving down neighborhood values. (by fighting tax assessments every year) not because my home is in anyway inferior..

First of all, anybody that starts claiming to be rich on the interwebs, I naturally tend to dismiss right off the bat. Just sayin'.

Second of all, isn't what you are doing, oh, I don't know, illegal?

HiTempguy wrote: First of all, anybody that starts claiming to be rich on the interwebs, I naturally tend to dismiss right off the bat. Just sayin'. Second of all, isn't what you are doing, oh, I don't know, illegal?

Frenchy's not rich, he just has a big house. The secret is he's a good scrounger for raw materials, and he built it himself. I've been to his place, I can only wish I had as much energy as he does for building stuff.

I have spent a bit of time fantasizing about homes in the Caribbean. First, construction is very different. Because of hurricanes, there is a lot of solid concrete, including roofs, and walls. Windows and doors, too. So, building costs are higher. That being said, I found that on St. Lucia, a true paradise if you bring your money with you, really nice homes are cheaper than here in SoFla. Trinidad, close to the same or a bit higher, Barbados, a good bit higher. Smaller lots, for sure, but a lot of Old World construction and design. Better craftsmanship, for sure. But, again, bring your money with you.

The Bahamas are a special place. Same construction requirements because of storms, but they seem to REALLY like Americans. Yes, the banking laws have something to do with it, and , yes, they do have crime, but overall a very inviting place to invest in property. I have a few very pleasant stories about Bahamians and how they deal with Yankees. Involving Kalik beer. My problem is I feel like I'm in Homestead FL but driving on the wrong side of the road.

I know of a really nice house in Alabama that I'd be glad to sell, seeing as I've been paying the mortgage on it while it has been sitting empty for 3 months or so. It is way cheaper than the 5th floor walkup in Paris.

mguar wrote: Sorry guys! Every time I go back to correct spelling lately it starts a new post.

When that happens, delete the extra (original) posts with the spelling errors

mguar wrote:

JoeyM wrote: When that happens, delete the extra (original) posts with the spelling errors

How can that be done? Remember you're speaking to someone who has handcranked engines to start, knows how to set points and adjust valves..and who regularly kicks the computer if it misbehaves..

Next to the date of your posts, there should be a button with an "X" on it. That's what you use to delete a post.

In reply to mguar:

Luckily, it hasn't depreciated anywhere near 40%, but I am trying to sell it at a price where I will have to write a big check at closing. I can't afford to sell it for anything less. I can afford to keep paying the mortgage if I have to though. I either need to sell it and be done with it, find someone to rent it out to, or find new job back in AL and move back into it.

Osterkraut wrote:

SVreX wrote: "Both" was a reference to both Africa and the "stan regions of the former Soviet Union", not "both" of the "stans".

You do have me there. But this:

SVreX wrote: and the "Stans" are not generally considered third world.

Is wrong. Not in context, not grammatically, but factually. Afganistan, for example, is generally considered a third world country (by the modern, non-Soviet definition). There's no forest, no trees, just Afghanistan, Kazakhstan, Kyrgyzstan,Tajikistan,Turkmenistan, and Uzbekistan all being generally regarded as third world countries.

No it is not. My statement AS WRITTEN was absolutely factually true. As I have already pointed out, the "stans" reference IN THIS THREAD was a reference to the statement in the very first post regarding "The "STAN" regions of the former Soviet Union". That would include Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

Afghanistan was NEVER part of the Soviet Union. I wasn't talking about it in any way shape or form. Why don't we just throw in Pakistan or Hindustan if you want to confuse things with grammatical suffixes. (Which BTW are BOTH considered 3rd world countries by some and, Oh, Look! End in "stan" )

Your error, not mine. But regardless quite pointless to this thread, so I'm done with this particular accusation.

mguar, you are exactly correct. There is one caveat: I bought a new house in 1994 for $88,500. The (now ex) wife and I were in the mortgage office working out the details of the mortgage and the girl working the desk said 'y'all qualify for a $125K loan. You need a bigger house' and we said no, we had already worked the numbers between ourselves and did not want to overspend. The loan officer showed us where we could afford the higher mortgage (we already knew we could but didn't want to be 'house poor').

This girl kept PUSHING that bigger loan till I stood up and said 'we are outta here' and then we went back to Plan A. So yes there is a lot of fault with the people who overspent but some blame goes to the mortgage companies for promoting the larger loans/more expensive houses.

Side note: we sold that house in 2003 for $133,500.

1500, you are exactly correct. Still, the amount of 'hard sell' had something to do with the recent housing unpleasantness.

The rest of that: when the underwriting standards were relaxed, people who never should have gotten into a position of that much responsibility did so anyway and probably faced someone just like the one I did. Yes, they were ultimately responsible for what they signed and in probably 98% of cases did not do their due diligence. The old standards previously weeded those out but were called 'unfair'.

That's probably the single biggest social engineering failure of the last century.

Back on topic...

mguar, what I am trying to say is that there are multiple ways to compare "apples to apples", and NONE of them actually accomplishes that goal.

You are trying to compare the physical characteristics. Similar construction, size, amenities, etc.

I am comparing the culturally determined economic class. Middle class in one location vs. middle class in another, etc.

The reason we won't find equal comparisons on the physical characteristics is because they are not equal. A "typical middle class" house in the US classifies as a very wealthy house in most parts of the world.

Your timber framed house would be nearly impossible to build in a place like the Dominican Republic- deforestation has left them no trees. It could be built, but all of the timbers would have to be imported at a truly astronomical cost.

The shingle roof you probably have would be considered an inferior product in parts of the Caribbean, etc.

The only way to make a legit comparison is by economic class. We don't do it because most of us don't like to accept the fact that by world standards, we are rich.

When I lived in the DR, my family's gross income was $500 per month. I thought it was peanuts before I got there. I eventually learned that we were one of the wealthiest families in the village, and the home we lived in (which I thought was pretty modest) was one of the wealthier homes in the community.

The apples to apples comparison economically would have put us in a middle class home in the local economy for significantly less than the cost of a middle class home in the US.

Same happens in a lot of countries. Why do you think so many US citizens retire to places like Costa Rica? When I was there (over twenty years ago), I could have bought a decent middle class home in a middle class neighborhood for under $20K. Prices are higher, but there are still a lot of bargains.

Any home that is getting international marketing is NOT a middle class home.

mguar wrote: If you're part of the uber rich who own and run banks you don't need to obey the laws?

Pretty much. Life is like a E36 M3 sandwich: the more bread you got the less E36 M3 you eat.

The whole thing about dicing up the iffy mortgages and repackaging them as part of AAA rated investments was fraud, plain and simple. There was no way to know exactly what was being purchased which is why it was done that way in the first place.

The unfortunate thing is that some of the problems which led to the housing crash still exist. I saw an ad in the paper the other day for new houses, $500 down, bad credit OK. That is EXACTLY how all this started in the first place: people come running to buy a $500 down house without stopping to consider the long term effects, wind up in over their heads and go to foreclosure. But before that:

The mortgage originator for this $500 down deal will quickly turn around and sell the mortgage to someone else, the originator gets a flat fee and is shut of the thing. The entity that bought the mortgage is now responsible for the whole kit and caboodle.

Something I learned two years ago: if your mortgage is sold and you start getting your statements from a major lender, that does NOT mean they own your loan! For instance, Wells Fargo was my mortgage SERVICER. They did NOT own my loan. The question I asked of WF was answered beginning with 'The investor who ultimately owns your loan...' There's a lot of shell corporations and stuff in the mortgage industry.

It's really difficult for the average person (or for that matter anyone) to track all that down and know exactly who really 'owns' their mortgage. And THAT is the secret of how the huge fraud went down with no one getting slammer time.

mguar wrote: I wonder if you aren't comparing Park Avenue New York with the cost of upstate New York ? One is cultured refined and uber expensive while the other is far more basic.

No, I'm telling you that the prices you see on television and on the internet are not representative of a real cross section of other local communities, that they represent a very elite slice.

I am also telling you that a 1/4 acre yard in one place has great value and in another is a negative. Culture determines value, not type of construction material or size.

If I choose to live in another location, I will want to maintain a similar lifestyle to what I have, meaning I will want to live where similar people of a similar socio-economic class live. Those places do not look the same in the US as they do in other places. Middle class in the US means 3/4 acre in suburbia with 2.2 kids and a dog. It is very different in other places. That is wealthy in some places, and impoverished in others.

But I see you are not open to other perspectives. Carry on.

mguar wrote: Why? back then banks were required to do due diligence.. (Post Banking Fraud of the 1930's) It seems like Bankers are always calling for deregulation. they did in the 1920-30's they did with the savings and loan and they did staring in the late 1990's When will we learn?

Never. In the 1920's, the housing market was not much different from the 1990's. Lending standards were relaxed, people bought houses like crazy, the bubble expanded until it popped. That bubble popping was one of the root causes of the Great Depression. The gubmint stepped in, slapped a few hands (AFAIK no one in banking did time then either) and the country struggled along until WW II gave us a convenient rathole to throw huge amounts of money into. (BTW, that is the secret to a booming economy: sell stuff that constantly has to be replaced. )

SVreX is right about houses in different parts of the world not being, for lack of a better word, 'value comparable' based on their construction. You can't give away a timber framed house in Yucatan in Mexico for instance. Why?

The termites down there are freakin' AMAZING. Everything is made of concrete or stone (or at least some sort of masonry) because that's the only thing they won't eat. Picture of a tree nest:

The Mayan ruins have no surviving wood for that exact reason. But up here where the termites are reasonably easy to control timber framing is pretty common and accepted. Solid concrete or masonry, not so much.

when I read values I thought it meant this...

... nevermind

mguar wrote: In reply to Datsun1500: I'm sorry. That is absolute non-sense..It makes as valid of an argument as blaming the pretty girl for getting raped. The real truth is most bankruptcies/foreclosures are caused by unavoidable events.. #1 is getting sick, divorce, loss of job, reduction in income, etc.. overspending is #7

That's why the wife and I bought a house we could afford, pay utilities on, etc with ONE income. IN CASE one of us lost our job, got sick (she left me, house is in my name only), etc etc.

It's called planning.

SHould have said IF she left me.

I love the income tax analogy..............spend $10k to save $3k!

Brevity. Look it up.

But, our plan is to pay the house off early, turn it in to a rent house, and then buy the house we want. Seems as though you knew that though......