“By the time we renovated them, it would have been more expensive to do that than building a brand new energy-efficient home. That’s how we made the decision,” Chinburg said…
The company comes up with homes prices, he said, by “basically adding up what it costs to buy the property and build the homes,” and then adding “a fair margin.”
“Unfortunately that’s the market now … we’re not gouging people,” Chinburg said.
It would be interesting to see a breakdown of the different costs. Older homes may not be a great state of repair, they may need to be brought up to code, and they may not have the current features property owners expect. All of this requires money.
This reminds me of what can happen with big box stores. Vacant ones may not be very attractive given maintenance costs and the need to reconfigure the space for another user. Why not just build another one?
And while teardowns tend to occur in places where land is desirable, I wonder if this points to a tough future for many older homes and the aging American housing stock: will the costs of maintaining or updating the home be perceived as worth it?
While working on a project, I noticed something while driving through a number of DuPage County communities: there are teardown homes everywhere. They are not just limited to desirable downtowns; they are spread throughout numerous residential neighborhoods. They are often easy to spot: much larger than adjacent homes and with a particular architectural style with stone or fake stone bases, lots of roof peaks, and plentiful garage space. Some could be categorized as teardown McMansions. (Some of these homes might be infill homes where homes were constructed on empty land.)
These teardowns follow some of the patterns I found in over 300 teardowns in Naperville. The architecture and design is similar. The homes are often located next to older homes, often from the postwar era, from the twentieth century.
One difference is that these teardowns are spread throughout communities. In Naperville, teardowns tended to cluster near the desirable downtown area. In some of the communities I drove through, teardowns and/or infill homes are all over the place. Some of these communities do not have downtowns like Naperville and have housing stocks of different ages. It was not unusual to see a teardown suddenly in a neighborhood on the edge of a community when in Naperville the teardowns tend to cluster in particular neighborhoods.
In a county that is largely built out and with suburbs now 50-170+ years old, there will be more opportunities for property owners, builders, and developers to tear down old homes and construct new ones. My sense is that while communities may have regulations about what can be rebuilt, the general atmosphere is in favor of these new homes as long as there is interest and resources to make it happen.
Rep. Ivory, R-West Jordan, sponsored HJR19, a resolution supporting a piece of federal legislation called the Helping Open Underutilized Space to Ensure Shelter (HOUSES) Act. Ivory is a manager for two real estate affiliated companies — Mission Property Management and 9615 Property Management — according to his financial disclosure form.
“We’ve learned that about 150,000 acres of federal lands are within city boundaries,” Ivory told the House Public Utilities, Energy, and Technology Committee on Thursday evening. “There’s another about 600,000 acres that are within a mile of city limits.”
The HOUSES Act, sponsored by Utah Sen. Mike Lee last year would open up certain public lands managed by the Bureau of Land Management to housing developers. Some critics of the legislation note that it doesn’t require those homes to be affordable, calling it a “McMansion Subsidy Act.”
The proposal would require that 85% of public lands sold be used for residential development and that 4 homes be built per acre. The other 15% could be used for commercial businesses or “other needs of potential communities.”
My guess is that the use of the word McMansion here refers less to a home with mixed-up or garish architectural features and more to big houses in the suburbs. More like “McMansions sprouting” or “cookie-cutter large homes” suddenly arriving in fields. The sprawl that has marked America for decades. And why should new housing opportunities go to people with resources? (See the different traits of McMansions here.)
At the same time, if these lands were opened up and they were filled with denser condos or communities of tiny homes, critics might still have concerns. Allowing the use of public land can be contentious as protected open spaces have value. If one goal is to not allow sprawl to take over everywhere, opening federal land is not a line some would want to cross.
Another question: does simply adding any housing to the housing stock help by adding to the supply? Or, is it more important that affordable housing is added? The charge of McMansions being constructed with subsidies suggests these may be houses for people who do not need help or that adding such housing might not help the housing issue.
As a result, empty-nest Baby Boomers own 28% of large homes — and Milliennials with kids own just 14%, according to a Redfin analysis released Tuesday. Gen Z families own just 0.3% of homes with three bedrooms or more…
This is a change from the historical norm, according to the research. Ten years ago young families were just as likely as empty nesters to own large homes…
For those who own their home outright, the median monthly cost of owning a home, which includes insurance and property taxes, among other costs, is just $612, according to the report.
“Logically, empty nesters are the most likely group to sell big homes and downsize,” said Bokhari. “They no longer have children living at home and don’t need as much space. The problem for younger families who wish their parents’ generation would list their big homes: Boomers don’t have much motivation to sell, financially or otherwise.”…
This speaks to one of the assumptions of American housing: older adults are expected to move out of larger homes and move to smaller homes or ones that better suit their needs later in life. This frees up their homes for the next generation to move into.
Is this the way it has always worked? Might patterns change heading into the future?
Several thoughts on these trends:
Americans like bigger homes. As the size of American homes has increased, might Americans want to keep these larger homes as long as possible?
Houses are places to live and strategic investments. Older residents may not need all that space but wouldn’t they want to cash out as late as possible on this large asset?
An emphasis on living independently and youthfully may mean that staying in a house is a sign of vitality (while moving would be a sign of weakness). Why sell if you can still live in a big house?
This could be the product of a unique confluence of factors in recent decades: a sizable birth cohort, a change in what housing is and what housing is available, and an unprecedented growth in housing values.
The average 30-year fixed-rate mortgage has soared to 7.49 percent, according to latest data from lender Freddie Mac, while many homeowners are locked into much cheaper 2 or 3 percent deals on their current homes.
Meanwhile the number of smaller houses for sale has diminished in recent years, according to listing website Realtor.com – pushing up the price of the limited inventory on the market.
The number of properties for sale that measure 750 to 1,750 square feet – the size range people who are downsizing tend to purchase – has dropped by more than 50 percent since 2016, according to Realtor.com…
Hannah Jones, Senior Economic Research Analyst at Realtor.com, said: ‘Home prices for smaller homes fell 0.4 percent year-over-year in September, but remained more than 50 percent higher than pre-pandemic.
On one hand, this is about a particular moment where demand is high for small houses, few are available, and selling and buying means acquiring a higher interest rate.
In many ways, the housing stock in the United States does not change quickly. Builders, developers, municipalities, buyers, and others interested actors need time to assess conditions and change course. Coordinated planning across different interested actors could help as housing conditions and needs change in the coming years.
About 3 billion people, roughly half of the world’s population, lives within 125 miles of a coastline, according to the Population Reference Bureau. Eventually, coastal cities could claim not just the waterfront, but also the water, building in their harbors, bays, canals and rivers.
It’s already happening in the Netherlands. With a third of its land below sea level, the country has floating offices, a floating dairy farm and a floating pavilion. Floating buildings are often built atop concrete and foam pontoon foundations, allowing them to sit on the water, and rise and fall with currents.
Proponents of the design argue that these buildings protect the environment. While a 2022 study published in the Journal of Water & Climate Change found that floating structures can have a positive benefit, attracting birds to nest and providing habitat and food for sea life, the study also found that they can impact light, currents, wind patterns and water quality…
Yet, as sea levels rise, low-lying countries like the Maldives are grappling with an existential threat, and building on the water is a way to create land from the encroaching sea. The government, in partnership with the developer Dutch Docklands, is building an entire floating neighborhood in a lagoon 10 minutes by boat from Malé, the nation’s capital.
Next year, the first phase of the 5,000-modular unit development will open — apartments, schools, shops and restaurants built on a floating landscape of serpentine jetties fitted together like Lego pieces. “That is the future,” said Mr. Olthuis, the Dutch architect, who developed the master plan for the Maldives development.
Even without the threat of climate change, these options could create interesting new possibilities in places around the world. Imagine visiting a floating area or more residential units with waterfront views and access.
At the same time, I imagine it would take some work to start mass-producing floating housing. Would there be common sizes or units? Is the infrastructure in place in many locations to accommodate such housing?
As Japan’s population shrinks and more properties go unclaimed, an emerging segment of buyers, feeling less tethered to overcrowded cities, is seeking out rural architecture in need of some love. The most recent government data, from the 2018 Housing and Land survey, reported about 8.5 million akiya across the country — roughly 14% of the country’s housing stock — but observers say there are many more today. The Nomura Research Institute puts the number at more than 11 million, and predicts that akiya could exceed 30% of all houses in Japan by 2033…
“Poorly maintained akiya can mar the scenery as well as endanger residents’ lives and property if they collapse,” said Kazuhiro Nagao, a city official in Sakata, along the west coast, where heavy snowfall can damage unattended structures. “We’re partly subsidizing demolitions, collecting neighborhood association reports on akiya, and trying to make owners aware of the problem by holding briefings.”
Although the akiya problem has not had a direct impact on sales in urban markets, where high-rises continue to go up, the potential hazards to communities posed by empty houses are growing along with their numbers, according to Akira Daido, chief consultant at the Nomura Research Institute’s Consulting Division…
Akiya are increasingly seen not just as a threat to suburban and rural markets but to the emotional health of the country, sparking family disputes over inherited properties. That, in turn, has led to a cottage industry of akiya consultants like Takamitsu Wada, CEO of Akiya Katsuyo, who acts as a counselor for squabbling relatives, often urging them to act before their properties become a lost cause.
This seems to come as the result of two significant patterns in Japan (and also present in much of the developing world):
An urbanizing population. For decades, people have flocked to cities and metropolitan areas. What happens to older homes and properties? Some may become popular in resort areas but many are less desirable. Rural areas have emptied out.
An aging population. What if populations age, requiring access to medical care and other needs, and a society needs fewer houses or different kinds of housing?
In one example from the story, an akiya is just 45 minutes from central Tokyo. In the United States, that would a suburban community that could be desirable to many.
What happens, ultimately, to all of these older homes? Homes do not have to last forever or house new residents.
Age may just be a number, but when it comes to the age of a home, it can be an indicator of its style, features, or condition. It can even help tell a story about where it’s located. Home construction, especially in modern building, comes in waves in areas with new developments springing up as a city grows…
New York came in as the state with the oldest median home age in the U.S. at 63 years. Rhode Island was a few years younger at 60, followed closely by Massachusetts (59), Pennsylvania (57), and Connecticut (55). No surprise that the five states with the oldest median home age are all located in the northeast as they had some of the largest growth in early America.
At the other end of the spectrum, the five states with the youngest median home age are Nevada (26), Arizona (30), Utah (31), Georgia (31), and North Carolina and South Carolina tied at 32 years old. Nevada has been the fastest-growing state for roughly five decades so it follows that the homes would be the newest. Likewise, the other ‘youngest’ states have seen large population increases and the housing being built to satisfy the demand…
The county with the oldest median home age in the U.S. is Clay County, Kansas. The county’s median year of structure build is 1941, bringing the county’s median home age to 79 years. The Sunshine State of Florida holds the ‘youngest’ county in the country, with Sumter County, Florida having a median home age of 17 years.
The median is helpful here: half of the homes were constructed before, half after. I do not know if the Census reports this data but it would also be interesting to know the 25th and 75th percentiles or other points along the data distribution. Are there also places that have more compressed or longer ranges of development?
Is it surprising that there a good number of older county medians in the center of country, roughly running from Texas to the Dakotas?
This reminds me of Dolores Hayden’s book Building Suburbia: Green Fields and Urban Growth, 1820-2000. She details waves of suburban development, dependent on factors like transportation technologies and ideas about what suburbs should be and include.
What happens to the housing in the locations with older housing overall? What percent ends up fixed up and restored or designated as part of a historic district? In contrast, what percent is undesirable and not brought into a more modern era?
A quick look at this map shows the biggest metro areas tend not to have a surplus while smaller regions have a higher likelihood of having a surplus. There is additional analysis showing at least a few metro areas that had a housing surplus in 2012 that did not in 2019.
While it is intriguing to see that some places have housing while others need it, the answer is not to have people in large numbers move from the housing shortage areas to those with a housing surplus. Both the rise of certain cities in recent years and the COVID-19 pandemic offered some hints of what this leads to: the effects of cities losing residents (if just temporarily) and rising housing prices in markets experiencing a lot more interested housing seekers. At the same time, as noted in the article, a national policy is difficult to imagine and/or enact.
Hopefully, by the time a similar time period passes and a new map is released, there are more metro areas with available housing.
“When everyone else is looking for a move-in ready home, there’s less competition for the fixer-uppers,” said Daryl Fairweather, chief economist at Redfin Corp. “I would not advise it for the faint of heart, but there are a lot of people who are willing to take on that risk because there is such a high reward.”
In 2021, homes in need of renovation sold at a faster pace than the two prior years, according to data from Realtor.com. Fixer-upper sales jumped 13.4% from 2020 to 2021, while the dollar volume of those deals surged 40.8% from 2019 to 2021, reflecting the high growth in sale prices across the broader market. Plus, listings described as “fixer-upper” or using other related terms by agents increased by 8% in December from the previous year…
In a survey by housing research firm Zonda, 33% of respondents said they would buy a fixer-upper for their first or next home but “only if I got a great deal.” Meanwhile, 27% said they would “if the repairs are minor.” Just 20% responded with a “no thanks.”…
On average, fixer-uppers cost 13% less than their move-in ready counterparts, or are about $40,000 less than the typical U.S. home value, according to Zillow. But if that home needs $80,000 to make it livable, that’s not such a great deal, Pendleton said. She recommends that those fixing up homes add an extra 20% onto their budget as a cushion for the unforeseen.
As the article notes, not everyone has an appetite, resources, or the skills for renovation. But, if the housing options are limited, this appears to be an increasingly attractive option for some. The data cited above suggests a small bump in people selling and buying such homes.
This is also interesting to consider from the other side: the sellers. If someone had a home that needed significant repair, this might be the time to not do those repairs and still get a good price. All those homes needing “TLC” or sold “as-is” now might not linger on the market for months.
More broadly, this hints at how much housing in the United States is eligible for repairs and renovation. The postwar suburban boom started roughly 70 years ago now. Those homes have already likely experienced a lot of repair and change and will undergo more in the upcoming decades. The McMansions of the 1990s and early 2000s will be the fixer-uppers of the future. And since Americans tend to like DIY projects and homeownership, we could be in for more decades of renovations.
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