Today we've come to talk about two things as it relates to the housing market:
1. The Burgeoning and exciting growth of the housing market after the precipitous fall in 2007-2009
2. The envious Americans that can't afford to buy the house they want and feel the need to complain about it.
In fact, the census tells us that new homes in America are bigger than ever–they seem to be increasing with our waist lines. The data tells us that in 1983 the average new home size was 1,725 square feet. In 2013, thirty years later, the average has increased to 2,598 square feet.
Standard size just got bigger
Are families increasing in size? No not exactly.
We can't honestly point to any specific need for any of this. It seems to be that it’s just what Americans want right now.
There is a prevalence of things that have become commonplace in many new houses. For example, thirty years ago there weren't too many people who had offices inside their home or big spacious “bonus” rooms over the garage.
Another interesting development is that houses from 3000-4000 square feet are occupying a significantly larger portion of new home construction than ever before. In 2005, homes that size (3000-4000sq.ft.) comprised about 15.6% of new home building–in 2013 it has risen to 21.7%.
What’s more–there has been a decrease in smaller homes. The number of 3 bedroom, 2 bathroom houses (classified as 1400 square feet or less) has dwindled to about 4% of the total housing market.
One more statistic on “Mega Houses”—defined as houses that are larger than 4000 square feet were 6.6% back in 2005 and they're now at about 9%.
So we definitely like our houses bigger than ever before.
None of this is probably all that shocking, so why is this newsworthy fodder for the Financial Procast?
Well, not everyone can afford these mega houses and a lot of them are complaining about it. It's just not fair that I went to college and don't make enough money to have the house I want. And I have to pay back all these student loans.
Wow…let us call the Whaaambulance for you.
One of the biggest complaints that we've seen recently is that younger people are finding it increasingly difficult to purchase real estate in their neighborhoods. The problem is that they don't have enough money to buy in the neighborhood they want and it's really hard to get financing when you are overrun with student loan debt.
Also, a recent story from CNN pointed out that it's really hard to compete with buyers who are purchasing with cash.
Gee, is it a sad commentary that this is such a revelation to so many?
If you were selling your house and you had two comparable offers but one of the two was contingent upon mortgage financing and the other was an “all cash” offer, which would you choose? I'll give you about 2 seconds to think that one over.
Of course you would rather go with the buyer who's paying cash.
Instead of waiting for the bank to agree that my house is worth the price we agreed upon and having some an inspection where you pick apart every paint chip and grout stain, I'll just got with the person who can write a check in a couple weeks after he/she has a title company do a little work to make sure everything is kosher.
Seems logical to me but what do I know.
There's another big gripe that seems to be coming from the same group of whiners and that is that they can't afford houses in the areas that they want to purchase them. Yes, it turns out that buying a house close to a city center is a bit more expensive than a comparable place in the suburbs.
And that's just not fair dammit! I want what I want and if I can't afford it, I'm gonna throw a temper tantrum and make a big fuss.
Perhaps we should all consider devoting more of our energy toward making MORE money and less time whining about the fact that we don't have enough. You are focused on the wrong thing here, this is not a function of being entitled to something because you jumped through all the right hoops.
You have to think the people from the “Greatest Generation” would like to punch these whiners. I certainly know the type of look my grandfather would give me if he heard me talking this way.
Please stop the insanity. Success is all about sacrifice and some of us have to sacrifice more than others. That doesn't mean that the system is messed up. The disciplined get richer and the undisciplined get poorer.