Why Do Houses Cost So Much?steemCreated with Sketch.

in #housing7 years ago
Housing Prices increase as Terms decrease

Why do we spend half of our working life to put a roof over our heads?

A master craftsman takes about three years to build their house. That is, building the perfect house, perfectly with all the amenities that they could dream up.

So, three years is the maximum amount of life energy that someone should spend on a dwelling.

But, we normally pay half of our wages over thirty years on a mortgage, most of our working life, on an abode. That is 15 years of your life spent in exchange for a place to sleep. And those that rent pay half of their wages for ALL of their working life.

15 is much greater than 3.
15 years of your life's work is much, much greater than 3 years.

And, even worse, most people live in a track home, where the actual man hours involved in the construction is less than 1 year.
Or in an apartment where the man hours involved is less than 3 months per unit.

15 is much greater that 0.25

So, why are we paying Half of our working life for a year of someone elses?

Is the property underneath the house really that valuable?
Not really. There are huge tracts of untouched land in America.
Or, put another way, if we gave everyone in America a decent sized plot of land to live on, say a half acre, then all of america could live in Rhode Island.

Property has been made scarce.
From the actions of the BLM all the way down to township zoning regulations.
All of these to control people and keep property values high.

Further, instead of being of a community mind, we are now of the independent individual mind. Or, instead of the new young couple needs a house and the community comes together and builds them a house, we push the kids out of the nest and say go buy your own damn house.

And what kind of house can a person who is just starting off at the bottom of the ladder get? The cheapest thing possible... but we can't have that. Trailers are verboten, small houses are limited to half century old places, and if you want to build anything new, it has to be big, gigantic, extra expensive.

Currently housing prices are increasing faster than anyone but the top 5%'s income. So, that dream of owning a home is getting more and more out of reach with each passing year.

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Which brings us to the real reason house prices are astronomical and getting worse. Banking and their creation, inflation.

People in America have been trained to believe that house prices going up is a good thing. The same people know that the prices of ground beef going up is distressing.

This is because we all have been indoctrinated into believing that our house is our biggest asset. Well, it is an asset, but it is not our asset, it is the bank's asset. It is our liability. Our biggest liability.

Your house is not something you can live without, and thus you can't sell it to pay off debts.
Your house is not getting into a better state of repair. It is slowly turning to rubble.
Your house costs you money; it does not put any money in your pocket.
Your house is your biggest liability.

So, lets look at rise in housing prices as you would look at rise in ground beef prices, as a result of inflation. And the definition of inflation is an increase in the money supply. Or banking...

If a bank finances a house for $10,000 and then
refinances the same house for $50,000, then the bank has just created $40,000 of new money. That goes out and makes all products more expensive.
And then the bank refinances for $150,000... the upward spiral continues.

Mortgage - (n) a French word meaning death note. Or you owe until you are dead.

So, the banks have gotten everyone to pay more and more and more by lowering rates and down payment requirements while increasing the percentage of income you can use.

Add this to cities and counties increasing the minimum size of houses while increasing fees and you have the aweful state of affairs that exist now. Where the baby-boomer generation are just getting ready to sell all of their houses, and the millennial generation not able to pay the astronomical prices, even if they wanted to.

Housing will come back into alignment of being less than 3 years of a persons working life.
The more the banks fight this, the harder the rubber band will snap back into equilibrium.
Already, it looks like the future of suburbs is a desolate, empty place you go to collect materials to build your earth ship.

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All images in this post are my own original creations.

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It is an interesting dynamic indeed. One question - is that three years just man power or does that included the cost of materials to build their home?

Either way it's still way less than paying off a mortgage, but was curious. On the flipside most people need a mortgage because they can't handle saving up to buy a home, which is ironic because it costs way more in the long run with a mortgage lol.

Whenever I talk to a person that built their own house, it is usually three years in the making.
So, that would just be three highly skilled construction worker years. So, it doesn't include materials. Those were usually collected over time building other people's houses.

And yes, with your typical 30 year mortgage, you pay the entire price (land and house) three times over.

Brilliant. I agree with every word.

Thank you very much for reading every word.

That last sentence is why I'm in architecture school. Post war housing and master planned developments are/will be obsolete. A new process of humane urbanism will be in demand when it all crumbles. Sadly, 'land development' is still raging as the status quo without any sign of stopping. Have you read Christopher Alexander?

I believe I have read a couple of his books, but it has been a long time.
Architecture school never did much for me, except to learn how to draft and stand at the counter for plan check.

Real construction experience helped immensely.

What do you think of rammed earth bricks (adobe)

I agree about architecture school. The current paradigm isolates the process of building into design and construction, such that carpenters aren't trusted with their own creative potential and architects don't know how to hold a broom.

I am going into school to rock the boat, and probably start a design-build firm when I get out. Christopher Alexander's series The Nature of Order is what inspired me to get into design-build professionally.

From what I understand, rammed earth is a monolithic wall made by pounding in place, between forms, dry or moist dirt. Adobe is made by mixing wet sand/clay and pushing it into molds to be sun dried and laid like bricks.

I worked for 6 months at a place called Open Source Ecology that may be of great interest to you, if you don't already know. We built hydraulically powered brick presses... one of many projects that I will probably write about later. If you can streamline compressed earth blocks, I think that's really something powerful. It's exponentially faster than adobe and doesn't require forms.

In my research I found that the strongest earthen building method is 'layered' mud, also known as cob or wet adobe. This is because it contains a tensile strength matrix due to the presence of straw. I think for our purposes, pretty much any earthen building method is strong enough, considering that the ancient ziggurats were built with adobe and are still standing.

Good stuff there.

I agree with you assessment about cob. And the structures you can make ... well, the ones I have seen are very comfortable looking and flow beautifully.

I would like you to see a post about compressed earth blocks. I know about them, but have no first hand experience with them.

I find that adobe outlasts concrete structures. Concrete has many problems, especially when coupled with iron rebar. (basically the combination destroys itself over time. As well as concrete disintegrating over time.) But, you go and see 100 year old adobe structures, and the are just sitting there like no time has passed.

I've worked on a few cob houses. In my opinion it's way too much work to build a whole cob house, unless you have unlimited free labor. I dont have any experience building with CEBs, only with building the CEB press. Maybe I'll do a writeup about my experience with Open Source Ecology.

Have you looked into ferrocement? It's much more resilient over time than concrete because of a high cement to sand/water ratio. Thus, it's harder for water to penetrate. Conventional reinforced concrete breaks down because it has low strength-to-mass ratio and the mix is usually very porous, thus leading to cracking and corrosion. Ferrocement has high strength-to-mass ratio because the metal armature is so dense, such that the amount of cement/sand needed is minimal. I've seen thin shell roofs less than 2 inches thick.

I have also worked with fly-ash concrete. Makes concrete hundreds of times stronger.

But still not as long lasting as the roman concrete.
I have only heard about it, but would like to learn more.
Where they use an acidic method of making concrete vs the basic method that is used all over now.

And yes, cob is time consuming, but I can teach women to do it. (As in, its not big heavy blocks).

If I had the money to build a house now, I would probably use CEBs
or I would build an underground house with PSP (Post, Shoring, Polyethylene ) from Mike Oehler.
https://steemit.com/gardening/@builderofcastles/earth-sheltered-solar-greenhouse-year-around-food-out-of-recycled-materials

I love that book! Only thing is I love natural sunlight too much. In order to get good lighting it must come from at least two sides of every room. Otherwise you get a glare. Also buildings deeper than 15 feet are really hard to light naturally, unless you have skylights, but then you lose all the fun of windows.

Mike Oehler's houses never looked dark and gloomy.
He opened windows in his house by basically opening slits in the earth.
It is a very interesting balancing act.

Who uses acid to make concrete?

These are the reasons I gave up trying to get on the ladder.

Twenty years ago, I would have said you are wasting your life...
Now, I would say that your wasting your life if you try to go to college and get a j.o.b. (just over broke)

This eventuality will damage my financial well-being immensely, but I can't wait to see the whole housing market crash and burn when the government is no longer in a position to artificially prop it up. It's pure lunacy that we live in a world where people don't understand that paying more for your necessities is a negative quality.

Your house was never an asset to begin with.
So, your "financial well-being" was only illusory.

Get some silver and some crypto-currencies...
I see you already have some Steem.

... and you will be fine. As any of the financial destructive things happen, gold, silver and crypto-currencies will go through the roof. They will more than offset the collapse of your house price.

Well, as with any asset or commodity, timing is everything. If I sold now and rented I would actually make a hefty profit. Since I don't plan to sell anytime soon, I anticipate eating the losses when someone yells fire in the crowded theater of real estate. We just need a place to live and this one was a relative bargain at the prices seen a couple years back when we bought. We had a sizeable down payment and plan to start cutting into the debt with larger monthly payments, so it's possible that we won't be underwater when the SHTF.

I hodl BTC and Steem right now and plan to invest in a couple more cryptos soon. Also throwing around the idea of taking delivery of some physical gold and silver if I can make enough trading cryptos, because you never know what might happen when things shake out.

Sounds like a solid plan.

I agree with all of this. It's all an illusion. Beside your house payment, there is also the yearly property taxes.

Why do we have to pay a tax over and over? Shouldn't it be just once? It's a rip off.

Then you have utility bills which are also taxed and those keep going up. And they keep adding new fee's like "renewable energy" fee and other nonsense.
What is renewable energy anyways and do we even use it? And why do we have to pay a fee for it when we are already paying for electricity?

And there are the maintenance cost, like a new roof that is designed to last for only a certain number of years when it could be made to last forever. Like slate, ceramic and metal roofs. Ceramic roofs can last 100 years or more.

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