My neighbors just passed away, and their 1500 sq ft house built in the early 1950s sold in like one day for $1.6 million. Which is pretty much what houses are going for here. If you want cheaper - and this has been going on for a while - you have to buy way further out. And there aren’t jobs out there that pay anything close to what Silicon Valley jobs pay.
The smaller prefab houses just outside the boundaries of our development go for over a million. They are not anywhere close to McMansions.
We’re out of space, unless you want to build on the hills which would be dangerous in earthquake country.
The goal is to build up, not out. The state is trying to force localities to approve housing higher than what is now allowed near transit hubs, and the localities, and the people, object. Even though this means that we can’t hire cops or city workers because of cost of living issues. And they are making six figure salaries.
I’m not @Dinsdale, but like him (IIRC), I live in Chicago’s western suburbs. I think that his suburb may be a bit more upscale/desirable than mine, but I looked up listings on Realtor.com for my suburb, specifically 2-bedroom homes (to define “modest-sized”).
Most of the houses in my suburb were built from 1925 to 1960; they’re on smallish lots, and aren’t typically very big. Popular styles are Cape Cods, Georgians, and Chicago-style bungalows (which is what we own).
What I’m seeing on Realtor.com is that 2BR houses are typically in the 900-1500 square foot range. Prices range from $250K to $350K; there are a couple of lower-priced ones, but those are foreclosures or homes in need of a great deal of work. Also, property taxes are pretty high here; one can expect that such a house would have an annual property tax bill in the high four digits.
I don’t know what conclusion this will lead to, but an inflation calculator tells me that $300,000 in 2022 dollars has as much buying power as about $34,000 in 1965.
https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=300%2C000.00&year1=202201&year2=196512
Any idea what those houses would have sold for back then?
I don’t, unfortunately.
We bought our house in 1996; the estimated sale price on Zillow for it is just over twice what we paid for it, 27 years ago.
This is all just spitballing here, but I found at least one place on the internet that says
https://www.gatewayarch.com/tbt-how-much-would-it-cost-to-live-in-1965/
Now, earlier, I figured the equivalent to $300,000 was $34,000, so if $21,500 is accurate, we’re estimating a difference in 1965 dollars of $12,500.
What is the value of $12,500 in today’s dollars?
Per the inflation calculator, it amounts to about $119,000.
https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=12%2C500&year1=196501&year2=202212
And if we go back even further…
Yeah. Townhouses in my complex are selling in the $800-$900K range. Insane. We bought ours in 1983 for $158.9. My parents bought the house I grew up in for $12k in 1952. The current dollar equivalent is around $134k. I looked up that house on Zillow a week or so ago, and it was shown with a $2M value. $134k wouldn’t buy anything within 50 miles of my house.
Unfortunately, a 2BR house can only house a family with up to 1-2 children of the same sex. That eliminates a large percentage of families. My house is like that. At least two previous owners had to move out for this reason.
In my area, a house like this (2BR, 1 bath, and small) is now valued at $700k or more. I’d have to go really far out to do better, with crappy public transportation.
Or to put it another way, we have plenty of space but we’re out of area.
NIMBYs will go to great lengths to make higher-density housing difficult or impossible, because they think their nest egg of housing equity is at stake with every adverse zoning decision. I have yet to figure out a really good way to provide an incentive for higher-density housing that can be win-win for current residents as well as fufure ones; a land value tax would be one way to do that, but good luck getting it passed.
That’s partly changing societal norms and expectations. My three sisters and I used to all share one bedroom in a 2 bedroom house (mom and dad got the other bedroom of course). 1 bathroom for six people. Yes, it was cramped, but if you don’t know any better you don’t think about that.
(Mom grew up in a 2 bedroom house with twelve people in it. Mom and dad in one bedroom, girls in the other bedroom, boys slept in the front room. Admittedly, they were poor, not middle class, but people used live closer together in smaller quarters)
Congratulations on having a large enough bedroom to accommodate 4 people. The bedrooms in my house are far too small to accommodate more than 2 people, even with bunk beds. Not enough floor space. Nothing to do with societal norms.
You’d be surprised- my two sisters and I shared a small bedroom. We had a high- riser bed that took up almost the whole room and all our heads were on one bed and our feet on the other. If there was a fourth sister, she would have been there too.
House? You were lucky to have a house! We used to live in one room, all hundred and twenty-six of us, no furniture…
Sounds challenging!
I have 6 siblings, and well know the challenges of tight shared spaces. We solved it by moving out the minute we were old enough to legally do so, but there were other home issues involved as well. My (ex)husband with 2 other brothers in the bedroom ended up moving into the garage to get breathing space. To get another body into my 2nd bedroom, they’d have to literally sleep in the closet or under the bunkbed. As I said earlier, 2 previous families at this house moved after they couldn’t fit another body into that room. (Built in 1934, and small!)
And you try and tell that to the young people of today. Will they believe you? No!
Um… It was just big enough to have a set of bunkbeds on either side, with a central aisle even narrower than a twin bed. I’m sure these days it would be regarded as child abuse.
It was 1/2 of a duplex, actually, not even a whole house.
Were the 50s-60s actually somewhat of an anomaly? Before Post WWII Levittown, did the average middle class aspire to a detached suburban home? Did unique factors at that time contribute to that change?
Then, in the 80s-90s, was housing commoditized - changed from providing shelter into the creation of wealth for developers and home-owners? As well as a means for wealth segregation?
I don’t think it was an anomaly as much as a change in society from less stratified to more egalitarian (at least among white people).
I don’t think we can speak of a middle class prior to that era. I do believe that people aspired to independence, which would likely include a homestead, but it wasn’t a realistic goal for many people.
Whereas the concept of middle class is that even the “typical” American worker can aspire to that level of personal success. I’m pretty sure that was a new idea in post war America.
Sure: lots of Americans who returned home from war had been exposed to the rest of the world. They didn’t have the same expectations for how to live when they got home.
They were also probably war weary and wanted to enjoy some prosperity after the deprivation they had endured.
And so when they did return they started lots of families (the baby boomers) and sought out the luxury of the new middle class lifestyle- this meant having a car, a house, and a stable job that would last them their entire career (and then cover their retirement with a pension).
I believe that this is the biggest reason that home prices are so far above the appreciation that would have otherwise been expected. That, and the fact that there are simply more people looking for housing than there were a half century ago.
A lot of good points. Thanks.
Is this generally accepted - that there was no middle class before the end of WWII? When I watch old movies from the 30s-40s, showing professionals working in NYC companies - they aren’t middle class?
Yes - very valid point about white people. But extending that thought - was it ever expected to be scaled even to all white people? (Not that I think there was any well-thought out long-term plan.)
Not sure I quite get this. Not sure a lot of WWII battlegrounds and staging locations in Europe or Pacific woulda reflected US postwar housing.
One possible solution to part of the housing crisis is cities rezoning some closer-in suburban areas as “small housing”. Instead of apartment buildings, houses for one person or a couple, about 1000 square feet, minimal yards but with public green space and a community garden. These would be the modern “starter homes” that hardly exist any more. One step away from townhouses or condos. Built to an affordable price point with simpler smaller amenities.
The majority of households now are less than four people these days, and shrinking.