re: When starter homes used to cost starter prices

quote:

---

Not too long ago there were subdivisions with houses starting around $125-150K

---

I bought my house in '05 for $137K. Appraised at close to $300K now. When I tell people my mortgage is $870/month, they think I live in a run down trailer.

quote:

---

That's just not sound financial decisions. Starter homes are 2300sq feet now.

---

I’m still in my starter home from 11 years ago. I wish I made poor decisions and went bigger now rates are higher

This is nothing new. My parents bought the house I grew up in for $32k, and by the time I bought my first house theirs was worth $500k. The first house I bought I paid $220k and the owners I bought from paid $85k just 15 years earlier.

I grew up in one of those. 900sf family of four. My family was not rich by any means but because that house was paid off, I was very well taken care of even as a spoiled teen who had to have Doc Martins and all the trendy crap.

quote:

---

1974 paid $29,900 for new, 3/2 in south Fla...3 miles from beach

---

Is the house still there? I wonder what’s it’s going for today.

My parents bought a house 12 miles west of Atlanta in 1970 for $20k. It was 4 bedrooms and 1 1/2 bath with a kitchen, small living room, carport, and a laundry room accessed via the carport. I think it totaled about 1,100 sf. That is the equivalent to about $157k in 2023.

Very basic house on 1 acre with a nice creek. My parents and me and my 3 siblings lived there throughout our childhood and teen years.

There are very few homes being built in 2023 that are traditionally priced as starter homes. A traditionally priced starter home today would be $150k-&170k. The lowest starter price I have seen, even in the farthest out suburbs of Atlanta and semi-rural areas is $250k+.

quote:

---

Excluding the lot/land (big exception of course), you could get that house built today for $100K, but no one in their right mind would do it. 8 ft 2x4 walls, 24" on center studs, no insulation (maybe wool), 4/12 pitch gable roof, 6ea single pane windows and 1 door, concrete block exterior, single tub bath with single sink and one toilet, formica counters, 10 total cabinets, no built-ins, no molding, linoleum floors, no appliances, one light and four receptacles per room, no HVAC, and a single coat of white paint on all surfaces and exterior.

---

I was coming to say this. If you remove a lot of things that people wouldn't live without and did back then, you could probably get pretty close to this price accounting for inflation. Hell, most men with any trade abilities at all could damn near build this house themselves with a little bit of time.

The funnier part is that the mortgage rate that is figured on this is probably pretty close to 10% or so.

quote:

---

Excluding the lot/land (big exception of course)

---

But that’s the rub. Throughout most of modern US history, you could buy a reasonably new “starter home” relatively close to the city center. Now? A lot in Baton Rouge in anything resembling a decent area of town is going to run you $150k+. In desirable areas, they are pushing $250k. For a lot, in Baton Rouge.

So where previous generations were able to buy a starter house following the three rules of real estate: location, location, location, and then just sit on it to build wealth, young people now are having to choose between very old run down fixer uppers and living a 30m commute from the city that won’t have near the appreciation value previous generations have enjoyed.

And I say all of this as a reasonably high earning “winner” in all of this. If my house burned to ash tomorrow, my net worth would go up because the house I could build on the lot, which is easily 50% of the value of the real estate, would significantly increase the total property value. Just sucks for people who can’t do what literally every generation before them has been able to do.