It's also creating a situation where the actual quality/value of properties for price is completely out of whack. There are large swaths of the country where low-grade cookie cutter houses in the suburbs that are legitimately worth maybe $350k at the current inflation rate are asking for $850k+ and generally selling $100k+ over ask. I have a $1.25M budget for a house and I can't find anything that's not a trash heap I can afford, and I'm not even looking in a coastal area, this isn't the legendary market in California, this is in the middle of the US.
It astounds me that more homes weren't wiped out from the Northridge earthquake. A lot of the housing stock in California in particular is like rotting toothpicks on eroding sand for a foundation. At least the homes generally lack basements so they will only fall a few feet off the posts. This particular reddit users is a contractor that posts their typical finds from structural inspections. People are paying between 800k-5m for the homes featured, generally:
Where you see winters homes are generally even in worse shape. Basements are leaking and eroding your foundation. Roofs are leaking and rotting your studs. Poor insulation is costing you a lot more money than in California. Chances are your water mains and sewer situation, both from your parcel as well as the municipal lines on the street, are all approaching end of life. Right as climate change brings heavier rains and flooding that stresses infrastructure where there isn't money as it is to maintain it even for old climate projections.
It's a real concern of mine and it's driving me towards considering building a custom home, at this point it's almost cheaper to do, especially since much of the work I can do myself and already have the necessary skills and tools. It's really and truly absurd what people are being expected to pay in comparison to what they get... I feel like most of the houses in the US are actually unsafe to live in because they don't care in construction about efficiency, indoor air quality, or mitigating common environmental concerns in those areas like radon gas. The minimal building codes in the US are truly obscene, and yet these slapdash houses are now priced for 3-4x what they are actually "worth" given the inflation rate.
I have a 5 page document of bullet points making simple asks/requirements for a new home build, and most of them are focused on safety, reliability, and efficiency, and none of them would be done by default by any builder in the US, most are required by law in Europe. It's kind of nuts.
Sure, this is non-exhaustive of course, but here's a few of the items on the list I personally think are very important.
* Foundation footings set to bedrock and insulated above the freeze line
* Exterior walls framed in 2x6 or 2x8 studs w/ a preference for non-bridging stud products like t-studs
* Exterior continuous insulation
* Kitchen range hood needs to be externally ventilated with proper make-up air system
* Using an ERV (Energy Recovery Ventilator) with filtered intakes for doing fresh air distribution within the home
* No use of plastic flooring products (e.g. linoleum, vinyl, carpet, LVP, LVT, et al) which off-gas and spread plasticizers within the indoor envelope
* Consider use of alternative methods of framing vs stick framing, like using ICF (Insulated Concrete Forms)
* Natural gas on-demand hot water heaters w/ electric instant hot systems close to tap for showers
* Roof trusses and decking properly constructed to account for the weight of solar panels on the south-facing slope
* Split electrical paneling for high voltage (230V+) and low voltage (120V) circuits
* Post-meter paneling for breaking out to circuit panels w/ a space for setting up a transfer switch to support future grid-tied solar with battery backup
* All electric appliances w/ the exception of on-demand water heater and sealed gas fireplace, this provides a pathway for higher energy efficiency / lower carbon emissions by using solar
* All cabinet work should be hung using french cleats for durability
* Exterior door frames should be installed fully to the studs (e.g. use 3-4" long screws)
* Interior doors should be solid core
* All interior walls should contain sound-rated insulation to reduce noise pollution and improve climate zoning
* All interior walls should be boarded with sound-sealant and noise rated drywall-type products
* Subfloors should be insulated and there should be sound/thermal insulation underlayment below the flooring
* The final construction prior to drywall should be able to achieve a blower door test score of ACH50 1.5 or lower with the make-up air and flue vents closed.
Not all of these things would be required by code currently in Europe, but they're all good ideas for durability, efficiency, or safety. This is obviously with the intent to use rooftop solar power as well. If I do build a custom house, it'll be built to the Passivhaus standard.
Your list is a 100% match with my requirements list for my build in the Chicago area in 2018. Sounds like you may have also spent a lot of time on Green Building Advisor articles and forums.
Our biggest challenge was finding contractors willing to execute to plan. My wife and I ended up doing a lot of work ourselves especially around insulation details and HVAC systems.
Yes, I am a big fan of Green Building Advisor and I also watch a lot of building YouTubers, predominantly Matt Risinger's Build Show[1].
He has featured other builders and home owners who also have websites or channels, and there I've found more information. There was one chap in central Canada that built a ~5k sqft house that only needed around 1600W to heat in the winter in subzero temperatures. That's the type of energy efficiency we need in new home construction if we're ever going to make a dent in climate change.
> Foundation footings set to bedrock and insulated above the freeze line
Not knocking it, but is this normal for single family home construction? Is it possible with reasonable cost? Is it primarily for an earthquake-prone region? The idea is cool, but I thought only skyscrapers went down to bedrock.
The answers to your questions definitely vary by region. If you're building a house, one of the first things you should do is get a structural engineer's assessment of the lot before you plan the foundation, because soil type, bedrock depth, freeze lines, environmental concerns, etc. all affect this.
But yes, it's fairly common to do this if you care about structural integrity over the long term. In areas with soil type that support it, it's more common to do simple slab foundations without footings, but in most of the US footings are used and the foundation is built as part of a crawl space or basement. Sometimes excavation for a basement is deep enough to get below frost line, or to bedrock itself, it depends greatly on the region.
"Reasonable cost" is kind of a subjective thing, but I'd say starting with a a good foundation is a bare minimum of requirements for what would end up qualifying as "constructed properly", so at least as far as I'm concerned this is an absolute requirement.
I'm still confused. Basements go below frost line, sure, but bedrock can be hundreds of feet below the surface. I don't know of any home I've ever seen that has piles driven down to bedrock. Is this just a regional thing? What am I missing here?
Yes, bedrock can be many hundreds of feet below the surface, and in other areas bedrock can be pretty near to the surface. This is one reason why you should have a geologic and structural engineering report done on a plot before you build (and arguably before you buy the plot). Depth to bedrock greatly factors into the cost if you intend to have piles put in to support your foundation.
In some areas, it's not actually necessary to drive piles to bedrock to get similar stability, instead piles are driven to refusal at a calculated depth based on the expected foundation load. In the regions I'm planning to build though, bedrock is nearer to the surface (or in some cases exposed above the surface as an outcropping), which means that the proper way to do things is to drive piles to bedrock.
I am not a structural engineer, and I don't know what is necessary where you live, my list was made for my specific purposes and shared because it was asked, it's not an argument in favor of any specific structural techniques, you should speak to a structural engineer in your area.
This sounds like you have thought about it a lot. Assuming I live in a moderate climate, is there a version of your list for someone who prizes having the windows open as much as possible? Eg I'd like a house where the kitchen opens onto outdoor living space, and we keep those doors open almost all the time. In that context, I've always thought leaky old windows were a good thing, because they allow for fresh air. What am I missing? Are these sealed houses nice to live in or do they feel stale?
> Are these sealed houses nice to live in or do they feel stale?
These well sealed houses actually have /better/ indoor air quality than a typical house designed for cross-flow from open windows. The reason is that they use powered ventilation that essentially runs all the time, so you have constant fresh air entering the house and stale air leaving, and you have specifically designed and planned exhaust points. The bonus to it is that it's much more energy efficient because the ventilation can be done using energy recovery ventilators (ERVs) which equalize the temperature between indoor and outdoor air +/- 3F, greatly reducing the cost to maintain a set temperature indoors while getting fresh air from outside, and the air can be filtered through MERV16 / HEPA filtration, reducing dirt and allergen ingress.
If done properly, the absolute best indoor air quality is found in Passivhaus construction.
Yes. We are not quite net zero given snowy winters in NH, but overall feels good.
We are on air sourced heat pumps. I think the US is really behind in thinking about creative geothermal like borehole heat pumps which act as a thermal battery (pump heat into ground in summer, extract it in winter.) They work but I can't imagine they are the best solution in my climate zone.
Also, for energy usage is seems appliances could use innovation. Why am I not recapturing the heat from my clothes dryer? Why do I have a separate refrigerator (heats house) and water heater (cools house) inside my house?
We tried a heat pump water heater but it was a total fail, as it is equivalent to putting an air conditioner inside your house. We had it in the ground floor of our walkout, which even in summer never breaks 70 degrees. Kids were complaining and actually turning the heat on...
That's... not actually true at all. In fact, in large parts of the country it's /required by code/ to separate 240V and 120V circuits, such as in most of South Central Texas (pop ~5M or so). There are absolutely 120V panels, and they are commonplace.
I will agree, however, that in much of the Midwest and Northeast it's more common to see single-panel installations. Separating the panels is important for safety, though, and it also allows better circuit routing when running the electrical.
This is really interesting. It must be region-specific, because I'm in the northeast and have never seen or heard of this practice.
Residential power around here is delivered as 240V split phase. Meaning, the service entrance load center has a bus bar for each leg, and the neutral is 120V from either leg. So you can have 240V circuit breaker that spans both legs, or a 120V that uses one in combination with the neutral.
How does the arrangement you're describing work? I tried searching for 120V-only load centers, but wasn't really finding anything. Or, did you mean bridge together the two legs on a traditional load center and use it as a subpanel of the service entrance?
Yes, that's how it works. Residential panels technically aren't rated by voltage, they're rated by amperage and the number of breaker openings. What is generally done here in South Texas is that on the exterior next to the meter there is a small primary panel for all the 240V circuits, and off of that a 100A leg feeds a physically larger subpanel in the garage area that has both legs bridged, acting as a 100A subpanel for 120V circuits.
Personally, I think having the 240V circuit panel outside is dumb, and the amount of times I've seen my or other folks breakers fail due to weathering is pretty much the reason why. How I've seen this done on new builds where care was taken is that both panels are brought indoors and the only thing outside is a split out to a subpanel specifically for the A/C / heat pump unit. Everything else comes indoors, there is a smaller panel setup for 240V and a subpanel for 120V circuits.
Obviously as the power entering the home is 240V split phase, you must break out a subpanel for 120V only if that's your intention.
My concern isn't square footage, it's safety, efficiency, and quality. Please point me to a place in the Denver metro where a properly built high-efficiency house (let's say blower door ACH50 1.5 or lower) can be purchased for $600k. I'll buy today.
You may want to consider realigning your expectations with reality. The reality is that if you have location flexibility, you can certainly find a nice house at a nice price in the USA. Your expectation that you can find a nice house with bleeding edge environmental efficiency is unrealistic. Maybe it shouldn't be, but that's life.
edited to add: the people who are really screwed are the people who need to work in a given location where housing prices are absurdly high and the housing stock is truly garbage. Silicon Valley and such.
I don't think my expectations are unrealistic, or perhaps it's better to say that our current reality is broken. I actually don't want a large house, it's wasted space that costs more money to build and consumes more environmental resources just to be a bigger pain to clean and maintain. My ideal home is less than 1800sqft, which is smaller than almost all new builds today because home building in the US is optimized on how quickly a house can be constructed and on square footage in the lot space so that they can get the highest ROI for the builder/developer.
Upthread somewhere I said my budget was $1.25M and I was having trouble finding houses that are even bordering on acceptable. I don't expect a house to exactly match my wants if it's not custom built for me, which is exactly why I'm resigned to likely needing to custom build (and surprised by how cheap it is compared to buying, when it used to be a luxury). The issue I have, and most people have, is that low-grade cookie cutter homes are MASSIVELY overpriced relative to their actual value as a place to live. Nobody in their right mind would be happy paying $850k+ for a KB Homes "starter home" in a suburb that cost less than $60k in materials to construct and was built to the absolute minimum standards they could get away with.
I think there's a huge disconnect between you and the parent's definition of "nice house." Because it's kinda nuts that for $600k you can't buy small exceptionally-constructed house. In this market there is no way to find houses where you pay more to get build quality instead of bigger.
Yes, you understood my point exactly. I would happily pay $850k for a 1800sqft house that is constructed properly with efficiency in mind. I don't want to pay $850k for a trash quality 3500sqft McMansion, but that's what's on offer at that price.
That is a massive budget, at least where I live (Southwest). You can get a nice place here, as long as you spend > 700k. Below that it definitely is trash heaps.
I'm really curious about opinions regarding "how this ends..."
Seems to me that, if current trends continue, home ownership will basically become extinct; everyone will become renters. Home ownership will take the same path as music over the last 20 years, where we used to "own" music (CDs), now we just "rent" music through streaming services like Spotify. But that's just my 2-cents. I'm curious about others' thoughts.
Will NIMBYs become an endangered species? A lot of regulations are aimed at keeping property values high with the idea that most (or at least a substantial portion of) voters own real estate and want it to appreciate. If we become a nation of renters with only a tiny minority owning real estate then who cares about keeping property values high anymore? It's not your problem! Your net worth will no longer be impacted by changes in the market value of the house you live in. Housing will be an expense, not an asset, and "the rent is too damn high!" might catch on.
It ends with a crash, like always. In 2008 home prices got cut in half. An REIT will overextend, miss loan payments and fail, flooding the market with homes, which will drop the market prices. This will cascade, taking out more REITs.
Exactly. Marks said that a crash is often inaccurately thought to be caused by a valuation excess; except in reality, they're caused by credit excesses and a failure to meet obligations on said credit on a large scale.
> Seems to me that, if current trends continue, home ownership will basically become extinct; everyone will become renters.
Yes, this seems to be the trend. In fact, it's not just home ownership that is now more commonly being rented, even the cloths on people's backs is up for rent. Between the rent-seeking behavior happening globally and the gig economy, it's hard to feel optimistic about the future. There's of course that famous prediction from the World Economic Forum: https://www.independent.co.uk/money/why-you-ll-own-nothing-b...
Agreed. The future for the masses is "freedom" to be a wage slave to whatever corporation provides a "job". It's weird how dystopian fiction seemed outlandish to me around 10 years ago, but now seems pretty on target.
I'd love to be proven wrong, but as you say, the rent-seeking is too damn high. I live in the US at the moment, but definitely looking to leave to somewhere with an actual social safety net / infrastructure.
Nowhere is perfect, but damn if the USA isn't moving backwards. I imagine the top plan to just hide in their fortresses / go overseas if it goes to hell (as the dystopian fiction tried to foretell).
At a certain point, I'll quit my job and go on strike if I have to deal with endless annual rent raises, moving between apartments, annoying landlords, etc. Can't imagine I'm the only one.
I don't see the analogy. I still own lots of music and don't rent it at all (unless you count listening to the radio). It hasn't gotten any more expensive to own music, either, digital tracks and CDs are still readily available and inexpensive.
The analogy imply that things are really good! The price of renting is so low, that even holding the price of purchasing constant people don't think it's enough savings to bother purchasing. People get to experience a wide variety of things, because the commitment is low. Multiple competing services aim to make consuming music (or housing) very easy.
The real analogy is furniture rentals for low income people. Paying 10x what something is worth for low quality alternatives and an inability to escape a cycle of being stuck renting when people want to buy.
I'm like you with music, but I feel obliged to point out that folks like us are outliers today. So the GP is correct in the sense that the majority of things are moving from ownership -> renting (though there'll always exist some die-hard holdouts).
You're right, and that is an important dimension to consider -- thanks for pointing it out!
I was coming from a perspective of ownership erosion, precipitated through the continuous encroachment of corporate rent-seeking behavior (because that leads to consistently growing revenue streams).
It ends with all homes being controlled and rents skyrocketing because they can make it as artificially scarce as they like and then god knows, squatting?
My friends who are double income but not tech are trying to buy a home now. Same experience as you. Cash offers always arrive and beat them.
I don't know how this ends but it's not going to be tenable for many folks to "live" in the USA as it stands.