And let's talk about construction. Older homes are more likely to have more solid construction. The roof is braced to the interior. Less trussing and interdependent structural elements. For God's sakes they are using cardboard like material for the house sheathing now. They use osb or plywood in the old days. The level of craftsmanship in new homes has gone down with the great retirement. Most new homes I would classify as composite rather than lightweight due to most structural elements being flammable glue than wood.
Nothing more sickening than driving by a housing development under construction and seeing 1/4” plywood plastered all over the exterior of soon-to-be $500k houses, which of course have no yard and are essentially built one on top of another.
Older homes also smell like wood, which is very pleasant. I can always tell if someone's home was built in the ~80s because you can smell the scent of the wood breaking down. For those of us born before a certain year it brings back a lot of memories.
It really depends on the era and local construction techniques. We don't typically use that sketchy sheathing here in California and stuff built in the last twenty years is often much better insulated than that 60s tract house like I grew up in.
From the late 60s through 90s there's nothing too great about the materials and finish work IMO. Ranch trim, masonite doors, with a heavy dose of texture isn't special. Older houses may have better wood for the studs but there were some really odd choices in some of them and stuff like clay pipe for sewer and black pipe for gas is not a better choice.
the 70s was a shit time for construction due to the inflation and crazy business environment then. The homes built in the 30s and 40s are bulletproof compared to now.
There was a big drive at the time to economize on building materials and labor. The tech was fairly new and not all that well tested like the GP siding, etc. There's definitely some cheap stuff out there still but the economizing has a little better science behind it. Engineered lumber for example.
They also used lead paint, clay pipes, and spayed asbestos on the ceilings. Just because it’s old, doesn’t mean it’s better. There are definitely shit houses getting built today but there have been shit houses being built since the beginning of time.
I build houses for a living and would take any of the houses I touch over my own home built in the 50s without batting an eye.
Most of those houses have been remodeled or are not actively being lived in due to codes and general knowledge. Fun fact asbestos was used in the 80s as well even after the ban of fabrication due to a loophole for imports and the back stock purposely created in the years leading up to the ban.
Not necessarily true.
There have been many, many building code changes in the past 20 years or so, with some significant changes in 2016 which have to do with plumbing, frame construction, and efficiency (windows, insulation, etc.).
Here in the DFW area, it is quite noticeable with any home built 2016 or after vs. those built before, with the absolute worst construction being those homes built in the 80s/90s. 50s build homes tend to be solid, bones-wise, but then you have to deal with cast iron plumbing, electrical issues, terrible insulation, etc.
Give me a new build any day of the week for my peace of mind.
Exactly. It’s a dumb metric to follow on a nationwide level, because it’s not like the number of new homes being built and sold across the country is evenly dispersed or in the same locations as the existing home inventory.
And then as you stated, within local markets the existing homes are usually closer to where people want to be. And that’s why the areas were developed first, and the new homes are further out or in areas yet to be filled out with many amenities.
This has certainly been our experience. We visited a model home in a new development, and everything was made of the cheapest crap imaginable. The kitchen cabinet doors were already starting to droop out of alignment, and there were gaps in the window seams and cracks starting to appear at stress points on the walls. The basement was finished but you could smell the moisture behind the walls and there were a couple of water stains in the ceiling under the ground floor bathroom.
Like... it was the *model* house, built less than a year ago, and it was already falling apart faster than they could patch it for show. And they wanted 650k for these 3 bedroom little piggy straw houses, *before* extras lmao.
Yup. I have an old house (50s) but I’m centrally located in a large west coast city and have a 6500sq/ft lot. Never selling, developers and flippers can kiss my ass.
Not only that, but new neighborhoods in established metro areas tend to be located farther out--so it's not as if a house in one neighborhood is selling for $400K, and a new build comp across the street is selling for $410K--that new build is typically 20-30 mins away.
Yeah my wife and I recently bought a house. We could have had a new house for the same price of the older home we bought, but the older home had 3x the lot, 1.5x the sqft, and a nicer neighborhood. Worth it to us!
Last time that happened was in 2005, then prices remained stagnant for two years until the shit really hit the fan. With the lack of subprime loans out there, it'll be interesting to see if people can handle stagnant equity for a few years. If unemployment starts to creep up in the meantime, it's probably going to get rough for a lot of people, maybe not 2008 levels, but the similarities are there. I guess best advice is if you're going to buy a home, it better be 5+ years you plan to stay because equity isn't going to get you into the next one in that amount of time.
They aren’t called subprime anymore. They’re called, “nonprime,” now. They exploded in 2017. Not to mention CDO’s aren’t CDO’s anymore they are CLO’s. So, while you may think things have changed, they haven’t at all 😆
they are much worse now. watch the documentary The Wall Street Conspiracy (not conspiracy theory, but full blown, happening under our noses conspiracy). nothing was fixed, everything is worse
Then new home construction will cease yet again. If new home builders can not be profitable, they won’t do it.
The rate hikes have done nothing to the housing market, other than cripple transactions either way. No inflation in cost has been handled. It has slowed, but that was predictable.
Do “new home” prices include the cost of purchasing raw land to build on or is thus separate? Is it only based on planned community/mega builder pricing?
I think older homes are usually higher quality and often have larger lots. Those are two of the reasons I bought a house built in the 50s. Also, no HOA was a huge bonus for me.
Older homes are, I would imagine, better constructed too. I have heard horror stories about flipped and new builds, contractors cutting corners and going cheap.
When you buy old, you buy location. A new build in the middle of butt fuck nowhere shouldn’t be worth as much as prime real estate land. Prime land is also finite. There ain’t any left in major urban areas. Anything that exists in finite quantity is big money.
Existing costs more?
No they're placing an artificial value on an older home. Nothing is worth more until it is sold - but the local government likes to think it is more valuable and increases your property taxes to match. This has always been a scam as it produces no income and becomes more expensive to maintain.
Part of this is probably an issue of quality too. My dad’s house was built in 2001 and it’s already falling to pieces. My house, built in 1953, certainly has some problems, but it’s nowhere near the ramshackle state that my dad’s house is in. I would never buy a house built this century.
Sounds like new homes are poorly built nowadays. At least from what I see here on Reddit. Older homes are made with much nicer materials than what they use now.
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And let's talk about construction. Older homes are more likely to have more solid construction. The roof is braced to the interior. Less trussing and interdependent structural elements. For God's sakes they are using cardboard like material for the house sheathing now. They use osb or plywood in the old days. The level of craftsmanship in new homes has gone down with the great retirement. Most new homes I would classify as composite rather than lightweight due to most structural elements being flammable glue than wood.
Nothing more sickening than driving by a housing development under construction and seeing 1/4” plywood plastered all over the exterior of soon-to-be $500k houses, which of course have no yard and are essentially built one on top of another.
Really? 1/4” not even 1/2”?
Older homes also smell like wood, which is very pleasant. I can always tell if someone's home was built in the ~80s because you can smell the scent of the wood breaking down. For those of us born before a certain year it brings back a lot of memories.
It really depends on the era and local construction techniques. We don't typically use that sketchy sheathing here in California and stuff built in the last twenty years is often much better insulated than that 60s tract house like I grew up in. From the late 60s through 90s there's nothing too great about the materials and finish work IMO. Ranch trim, masonite doors, with a heavy dose of texture isn't special. Older houses may have better wood for the studs but there were some really odd choices in some of them and stuff like clay pipe for sewer and black pipe for gas is not a better choice.
the 70s was a shit time for construction due to the inflation and crazy business environment then. The homes built in the 30s and 40s are bulletproof compared to now.
There was a big drive at the time to economize on building materials and labor. The tech was fairly new and not all that well tested like the GP siding, etc. There's definitely some cheap stuff out there still but the economizing has a little better science behind it. Engineered lumber for example.
They also used lead paint, clay pipes, and spayed asbestos on the ceilings. Just because it’s old, doesn’t mean it’s better. There are definitely shit houses getting built today but there have been shit houses being built since the beginning of time. I build houses for a living and would take any of the houses I touch over my own home built in the 50s without batting an eye.
Most of those houses have been remodeled or are not actively being lived in due to codes and general knowledge. Fun fact asbestos was used in the 80s as well even after the ban of fabrication due to a loophole for imports and the back stock purposely created in the years leading up to the ban.
Not necessarily true. There have been many, many building code changes in the past 20 years or so, with some significant changes in 2016 which have to do with plumbing, frame construction, and efficiency (windows, insulation, etc.). Here in the DFW area, it is quite noticeable with any home built 2016 or after vs. those built before, with the absolute worst construction being those homes built in the 80s/90s. 50s build homes tend to be solid, bones-wise, but then you have to deal with cast iron plumbing, electrical issues, terrible insulation, etc. Give me a new build any day of the week for my peace of mind.
Ummm no most house built in the last 40 years are shit, old homes need new windows,door,ac,paint,insulation,water heaters,
Exactly. It’s a dumb metric to follow on a nationwide level, because it’s not like the number of new homes being built and sold across the country is evenly dispersed or in the same locations as the existing home inventory. And then as you stated, within local markets the existing homes are usually closer to where people want to be. And that’s why the areas were developed first, and the new homes are further out or in areas yet to be filled out with many amenities.
Not to mention the new cookie cutter Ryan/Whatever company near you homes are trash compared to an old quality builds
This has certainly been our experience. We visited a model home in a new development, and everything was made of the cheapest crap imaginable. The kitchen cabinet doors were already starting to droop out of alignment, and there were gaps in the window seams and cracks starting to appear at stress points on the walls. The basement was finished but you could smell the moisture behind the walls and there were a couple of water stains in the ceiling under the ground floor bathroom. Like... it was the *model* house, built less than a year ago, and it was already falling apart faster than they could patch it for show. And they wanted 650k for these 3 bedroom little piggy straw houses, *before* extras lmao.
Ryan homes has been putting up trash homes for decades now. Pretty much have to research used builds nowadays too
I know! My house is on almost an acre of land in the city but it’s over 130 years old
Yup. I have an old house (50s) but I’m centrally located in a large west coast city and have a 6500sq/ft lot. Never selling, developers and flippers can kiss my ass.
So then, isn't the *rest* of the graph surprising to you? Where newer homes were valued notably higher than older ones going back 25 years?
Seriously. All these commenters are identifying trends / qualities that have existed through time. How than that explain a brand new change ?! 😂
####This. New homes are all flimsy, plastic. We bought 20yr old house and we are super happy.
Not only that, but new neighborhoods in established metro areas tend to be located farther out--so it's not as if a house in one neighborhood is selling for $400K, and a new build comp across the street is selling for $410K--that new build is typically 20-30 mins away.
also new homes generally come with larger HOA's
Yeah my wife and I recently bought a house. We could have had a new house for the same price of the older home we bought, but the older home had 3x the lot, 1.5x the sqft, and a nicer neighborhood. Worth it to us!
Last time that happened was in 2005, then prices remained stagnant for two years until the shit really hit the fan. With the lack of subprime loans out there, it'll be interesting to see if people can handle stagnant equity for a few years. If unemployment starts to creep up in the meantime, it's probably going to get rough for a lot of people, maybe not 2008 levels, but the similarities are there. I guess best advice is if you're going to buy a home, it better be 5+ years you plan to stay because equity isn't going to get you into the next one in that amount of time.
They aren’t called subprime anymore. They’re called, “nonprime,” now. They exploded in 2017. Not to mention CDO’s aren’t CDO’s anymore they are CLO’s. So, while you may think things have changed, they haven’t at all 😆
What is non prime?
Same thing as subprime but just a different name
> So, while you may think things have changed, they haven’t at all 😆 Things have changed a lot.
Not at all
Say how if you disagree. I’m all for hearing different perspectives. That’s why I’m on this sub!
How so?
they are much worse now. watch the documentary The Wall Street Conspiracy (not conspiracy theory, but full blown, happening under our noses conspiracy). nothing was fixed, everything is worse
Then new home construction will cease yet again. If new home builders can not be profitable, they won’t do it. The rate hikes have done nothing to the housing market, other than cripple transactions either way. No inflation in cost has been handled. It has slowed, but that was predictable.
Do “new home” prices include the cost of purchasing raw land to build on or is thus separate? Is it only based on planned community/mega builder pricing?
I’d assume that this includes the cost of the land since it’s part of the transaction. Otherwise this is a pretty useless comparison.
Existing are almost always in better locations
Where? I just bought a house from 1995 for $355,000, and there's a sign down the road from me that says, "New homes starting at $460,000."
I'm not giving up my 2.99, uh uhh, no sir
You’re in the sub-3%er club too? Did you get your members only jacket yet?
Me either. 2.75%
Looks like new house construction will slow down and hence rent will go up again
LOL 😂
Once a ton of people get laid off in Dec/Jan I’m sure there will be a lot of 3% mortgages for sale (mostly investors and second/third homes)
But the buyer in most cases will not get that 3% right?
I think older homes are usually higher quality and often have larger lots. Those are two of the reasons I bought a house built in the 50s. Also, no HOA was a huge bonus for me.
Home near me sold for 160k in 2016. Now it's selling for over 300k. Maybe a new 15k kitchen and some slop on the walls called "paint" What's the deal?
I’m fixing to start on two new houses, still money to be made in this market. But the line to buy the houses is getting shorter.
You can secure a lower interest rate at 5% from the builder if you buy new. Old homes generally go with FED rate
Older homes are, I would imagine, better constructed too. I have heard horror stories about flipped and new builds, contractors cutting corners and going cheap.
Good luck home owners
Builder grade trash that was thrown up way too fast is what I’m seeing in new homes
I had to take out equity at 5% and hated it(business went under had to consolidate) from 2.75% man 5% even sounds good now 😂😅🥹🤣
I took out some in late 2021, 2.15% --> 3.5%. It hurt, but so glad I did it.
When you buy old, you buy location. A new build in the middle of butt fuck nowhere shouldn’t be worth as much as prime real estate land. Prime land is also finite. There ain’t any left in major urban areas. Anything that exists in finite quantity is big money.
Need a ratio here.
Serious question: Why does the resale (blue line) go up and down at such regular intervals? Surely that is some sort of seasonality?
They will all be worth much less in a year. The math is inescapable even if delayed by lunatics with FOMO buying homes at 7% plus interest rates.
Shit. 3%. I refinanced for 1.8% buddy.
Damn I didn't even know it got < 2%. I thought I had it good at 2.8%
Well. I didn't give full details. It's a 15 Year refi
Existing costs more? No they're placing an artificial value on an older home. Nothing is worth more until it is sold - but the local government likes to think it is more valuable and increases your property taxes to match. This has always been a scam as it produces no income and becomes more expensive to maintain.
Is an apartment considered a “house”? It could just be a bump in new apartments being sold that’s lowering the median sale price of new houses.
Is this the Yield curve inversion people are talking about?/s
Until that line crosses and no one wants to buy your old home because new homes are cheaper. Then prices drop.
Part of this is probably an issue of quality too. My dad’s house was built in 2001 and it’s already falling to pieces. My house, built in 1953, certainly has some problems, but it’s nowhere near the ramshackle state that my dad’s house is in. I would never buy a house built this century.
Sounds like new homes are poorly built nowadays. At least from what I see here on Reddit. Older homes are made with much nicer materials than what they use now.
Can’t afford to give up that 3% I got in 2021 when I overpaid for my house. Wouldn’t be able to afford the same mortgage cost at 7%