
The house I was born in sold for $4000 - cmbaus
http://baus.net/4000-dollar-house/
======
napolux
Maybe it's just a stupid statement made out of tv shows like 'extreme makeover
home edition', correct me please if I'm wrong....

In US most of the houses seems to be made over a wooden structure, making them
more fragile, easy to be renovated / customized / moved / rebuilt and, most
important, cheaper.

Here in Italy (and AFAIK in the whole Europe) there's nothing like that: full
concrete and a proper basement, basically no wood (except from roof).

I just bought my first flat and I've spent 168k euros for a 85 square meters
flat 25 km from Milan. Despite the crisis, prices are stable and/or are
decreasing very slowly.

You will never find, even in the worst zones of the cheapest cities an house
at 10k euros here, neither a bunch of bricks will be sold for that. :)

~~~
waps
Well you can find houses like that : the ones that have to be demolished
(often in relatively nice locations too), and rebuilt. Of course, buying the
property means that after that there's still 300k to be paid to build a new
house.

------
rdl
I'd really like to see a low-tax, low regulation part of the US (WA, NV, TX,
or TN) where someone buys a few thousand acres and lets people build
"temporary" structures (with power/fiber/wifi/etc.) for living and solo-
working, combined with some more permanent structures for offices, meetings,
socialization, etc. Essentially like a 2-5 year Burning Man encampment campus
for various startup projects.

If someone's "personal burn rate", while living comfortably and efficiently,
were $10-15k/yr (while still eating great food, socializing, medical care,
etc.), it would make mostly-equity compensation as part of a founding team
really viable.

The point would be to get the benefits of density without the costs of luxury.

~~~
sliverstorm
Are you proposing we endorse a shantytown? History has shown us those go
downhill fast, and I don't see how temporary shelters _won't_ turn into a
shantytown (and amusingly enough become permanent, much like every piece of
shanty-code I write)

~~~
rdl
A shantytown full of rich (at least, in earning potential elsewhere)
startup/burningman type people which grows around convenient fiber might be
different than one full of labor surrounding a mine.

~~~
sliverstorm
I don't really buy it. The hallmark of shantytowns is everything is "half-
assed". I can't see tech workers breaking out the saws and sandpaper and
building quality neighborhoods in their spare time, and nobody will invest
real money and labor into something you intend to bulldoze in 3-5 years. You
will also get a domino effect; people with money and the desire for a nice
place to live will automatically avoid your shantytown, filling it with people
that don't mind living in squalor, leading to a more squalid shantytown- thus
looping back on itself.

~~~
dfc
_"I can't see tech workers breaking out the saws and sandpaper and building
quality neighborhoods in their spare time"_

I should have you over to my house sometime. I completely tore out the
downstairs of my house. The guy that's helping me with the kitchen cabinets is
an old cobol programmer. I think your experience with carpentry and people
that enjoy carpentry might leave a little to be desired. (I don't mean any
disrespect by this) and I'm not saying that just because you chose "saws and
sandpaper" for what is needed to build a structure.

I am curious why do you think tech people would not be interested in building
things using lumber? If you are looking for a book to read pickup "Shopclass
as Soulcraft." I don't think its going to make you want to pick up a trade but
I think it might give you a different perspective.

~~~
sliverstorm
People keep thinking I'm saying technical folks don't like wood, or something.
I just mean when everyone already has a day job, and no one has real training
or worthwhile experience, you are probably going to have trouble getting good
results in a reasonable amount of time.

IMO this falls into the ol' boat of engineers thinking they can do everything
just as well as people who were professionally trained. "Drilling for oil? How
hard can it be!"

P.S. Unless frames come precut or premade these days, how exactly do you plan
to build a house without some form of saw?

~~~
dfc
It was the sandpaper part that sounded funny to me.

Speaking of framing, you know that aisle of 2x4x8s you walk past at home
despot? They are not all 96 inches long. If you look close some are labeled
"framing studs." They are precut to 92 5/8 precisely so that you don't need to
cut down every stud when you are framing a wall.

~~~
rdl
I personally kind of hate stick-built stuff; my dream home is concrete and
steel and glass, with textiles and strategic wood for sound and aesthetics.

~~~
lostlogin
You might not like New Zealand then - its 95% stick built (well, wood) and has
a minimum of concrete. That was changing, but after seeing the Christchurch
earthquake, this wobbly island isn't going to be allowing heavy stuff that
isn't braced like a battleship anytime soon.

------
danteembermage
Worth pointing out is that even $40,000 houses appear to have $1,800 a year
tax bills. Treating that tax as a perpetuity you would need to invest
1800/.0357 = $50139 at mortgage rates to break even. It's still surprisingly
inexpensive, but property taxes tell at least some of the story. A $4000 sedan
that obligates you to $2000 in annual license fees is not a particularly good
deal, even if it will run for another ten years.

------
smartician
This is why I'm very reluctant to buy a million dollar shack here in Silicon
Valley. What if the tech industry goes on the same trajectory as the
automobile industry, and San Francisco ends up being the Detroit of the
2020's? Is there something intrinsically "magic" about the Bay Area, or is it
just the coincidental clustering of tech companies that makes this place
special?

------
cmbaus
Couple comments. I didn't research the exact numbers in the post. I heard the
house was sold for $4k, and the point wasn't about the exact price, but my
perception of life after growing up in an area of constant economic decline.

Also one of my goals for 2013 was to hit the home page of HN. I didn't think
my first attempt would do it. Thanks!

~~~
nutate
I grew up there from 79 to 97. My mom was mayor and a ton of my friends live
there. I've since gone to school and lived in NYC, LA and now DC. Jamestown is
still one of my favorite places on the planet. Cheap housing is just a bonus.

It's incredible how far your money will go there:
[http://www.realtor.com/realestateandhomes-
detail/2055-Willar...](http://www.realtor.com/realestateandhomes-
detail/2055-Willard-Street-Ext_Jamestown_NY_14701_M44508-69809?row=1)

The question is how to get the money... :) probably contribute to your
community. Err I mean contribute a new app idea to the community of angel
investors. Whatever. ;)

------
rjdagost
This post struck a chord with me as I'm from the central NY region, not too
far from the OP. I get back to my hometown every year or two and the decline
is more apparent every trip. Everything from my youth- the places I worked
part-time, the schools I went to, the places I used to hang out at, the major
local employers, they're all gone or in major decline. Many houses are boarded
up, abandoned, and are being slowly reclaimed by nature. Most of my school
friends have moved away, and most of those that have stayed around have
basically wasted away. In my own lifetime I have seen long-term economic
decline happen and it has scarred me in a way that is difficult to articulate.

~~~
cmbaus
I'm glad you liked it. I believe I (and other people from the area) look at
the world differently than those from more prosperous regions.

There is a constant thought in the back of my head that this could all be
temporary. Boom towns go bust. Industries go bust. But I also think I've left
opportunity on the table because of my fear.

I've come to realize that the difficult part of life is balancing the upside
with the downside -- knowing when to be conservative and when to be risky.

If I could give advice to anyone leaving school or home for the first time it
would be: remain cognizant of the downside, but don't let it prevent you from
taking advantage of the upside if it presents itself to you.

------
jluxenberg
Homeowners of HN: how do you justify tying up a large percentage of your net
worth in a home?

~~~
declan
I own a single-family house on the San Francisco peninsula which I bought
three years ago (and spent the summer of 2010 remodeling it and the summer of
2011 landscaping it).

What others have said elsewhere in this thread is true: owning a home limits
your flexibility in terms of moving for another job. It ties up a lot of your
assets, for most people, in a decaying pile of lumber that needs maintenance
and upkeep and furnace replacements and driveway repaving and so on.
Patrick.net, run by a SF bay area programmer-renter, is an able representation
of this point of view.

For me, the benefits outweigh the costs. I'm in the mid-peninsula off the 280,
so if necessary I can work at any job between and including San Francisco and
San Jose and closer portions of the east bay. I was tired of renting and
wanted a place that I could customize and run multiple Cat6 and RG-6 cables to
each room, install a home automation system, etc. Plus single-family homes
available for rental aren't as nice as the ones available for purchase.
Finally it's a hedge against inflation.

Those are reasons why, to a first approximation, anyone in the SF bay area who
plans to stay here long enough and can afford to buy a home does.

As bradleyjg said further down, the relative desirability of home ownership is
also due in part to government subsidies. The first $250,000-$500,000 of
appreciation in home value is not taxed when you sell. And mortgage interest
is tax deductible.

~~~
robotresearcher
| And mortgage interest is tax deductible.

In some jurisdictions. Not Canada.

~~~
declan
Quite right. What's interesting is that the Canadian homeownership rate is
similar to that of the U.S., last I checked, even despite the different tax
treatments.

~~~
robotresearcher
My theory on this is that the prices adjust to cancel out the benefit from the
tax break. The out-of-pocket expense to the buyer is the same and the general
taxpayer is subsidizing a higher price for sellers. It's a cash transfer from
taxpayers to established landowners cunningly disguised as a legup for the
middle class.

I think the prices must adjust in this way since the supply of housing close
to the supply of paid work is limited.

If anyone can point me to a decent analysis of this, I'd be grateful. But this
is my pet theory.

------
boticus_prime
I'm from the same town, and now live in the Bay Area. I still can not get used
to the housing prices here...which have been increasing recently:
[http://www.mercurynews.com/portlet/article/html/imageDisplay...](http://www.mercurynews.com/portlet/article/html/imageDisplay.jsp?contentItemRelationshipId=5138973)

When I visit my hometown, I feel like all the prices are in a different
currency.

~~~
cmbaus
I didn't think there were many other people from Chautauqua county here.

~~~
boticus_prime
I think the only time I have met anyone from Chautauqua county out here was
when I went to see a Bills games at the Northstar Cafe in SF. When I was
reading your blog post, I actually jumped a bit, because I thought I
recognized the house (the red-brick street combined with the Bills banner is a
familiar sight).

~~~
cmbaus
Contact me. Let's get a beer. I went to the Bills game in SF this year. We got
killed, but it was still a lot of fun.

------
blazespin
OP neglects to mention if there were any back taxes or water liens owed. Or if
the house had been condemned. All I could find was one lot (not house) under
8K.

[http://www.zillow.com/homes/for_sale/Jamestown-
NY/pmf,pf_pt/...](http://www.zillow.com/homes/for_sale/Jamestown-
NY/pmf,pf_pt/5317_rid/0-8000_price/0-29_mp/days_sort/42.180451,-79.108257,42.002366,-79.376736_rect/11_zm/)

~~~
cmbaus
The point is that the house isn't worth even the back taxes on it. That is
hard to imagine from a west coast perspective. Even after the bust in 2009, I
don't think it got that extreme in too many places.

~~~
outworlder
Not sure if it was 2009, unless the effects in that region were felt only
years later.

I was having a look at another cheap house from around the area. Just check
out the graph: [http://www.zillow.com/homedetails/23-Barrett-Ave-
Jamestown-N...](http://www.zillow.com/homedetails/23-Barrett-Ave-Jamestown-
NY-14701/29894630_zpid/)

------
cperciva
_The population of California has a perception of growth, while the Rust Belt
has a perception of decline. This must effect the collective psyche to point
where taking risk becomes less socially acceptable. Taking entrepreneurial or
financial risk when you are gainfully employed is less tolerated when many
people around you (and in fact entire industries) are struggling to get by._

I think there's something more subtle going on here. If the economy as a whole
is doing well, risks tend to pay off; if the economy as a whole is not doing
well, risks tend to not pay off. You don't even need any social pressure to
make people in the rust belt take fewer risks than people in silicon valley;
you just need people who use past performance as an indicator of future
returns.

------
nutate
My mom was mayor of Jamestown for a couple years. Most houses that were
maintained have kept their value. We just have a twisted sense of how housing
value should work.

Even around Chautauqua lake, where the best real estate is in that county, the
max is probably around $3mil for houses that would make an $3mil house around
here (DC) look like a cottage.

Location, location, location. I can drive there in under seven hours these
days. Straight through central PA which makes central Jamestown look like
London.

------
yekko
More startup needs to move to low cost areas.

~~~
general_failure
It's better for well established players to move to low cost areas. Startups
need to be in places where there is abundance of talent. Engineering salary
are extremely high as-is, it would be nigh impossible to make them move to the
middle of nowhere.

~~~
bdcravens
In a world of PaaS and the cloud, and amazing communication capabilities like
Skype and Google Hangout, why? What about CA or NY makes them more talented?
They're there because the work is there, not vice versa. Also, you don't have
to be in the middle of nowhere. There's plenty of large American cities where
you can buy a nice house for less than $150K. I realize that the SF reality
distortion field would suggest that everywhere else is powered by oil lamps,
but I figure as long as you have high speed Internet and are within an hour of
an Apple store, then you are quite capable to getting the work done from your
home.

~~~
general_failure
What you are saying makes total sense as a founder. But for an engineer there
us no motivation to move to an area where there are not many opportunities.

~~~
bdcravens
I say that as someone who has remained gainfully employed for several
companies, only one of which was local, over the past several years.

------
ultrab
WTF?

If an _house_ can be built for $12000, why are flats selling for $100k+
routinely?!?!?

If it's just due to land value, then why not build ultra-tall skyscrapers to
amortize it?

~~~
cmbaus
I don't think a house can be built for $12k. Houses in the rust belt routinely
sell below replacement cost because demand is so low.

~~~
yyqux
Right, and a house is a liability as well as an asset: at that sort of price,
the main cost of owning the house is the ongoing maintenance, utilities, etc.

~~~
mikestew
In NY state, I think the main cost of the house is going to be property taxes.
I don't recall the rates, and don't care to look them up. But I do recall
(when the subject has come up) that my sister-in-law in Alden, NY (small town
30 miles east of Buffalo) pays ridiculously high property taxes in comparison
to what we pay here in Redmond, WA.

------
Jun8
In his much-quoted column, Friedman
says([http://www.nytimes.com/2013/03/31/opinion/sunday/friedman-
ne...](http://www.nytimes.com/2013/03/31/opinion/sunday/friedman-need-a-job-
invent-it.html?hp&_r=0)): "Every middle-class job today is being pulled up,
out or down faster than ever."

Middle income families who rely on manufacturing has been hit hard, with no
prospects of an exit.

~~~
gridmaths
yeah, well maybe all manufacturing will be superseded by 3D printing.. in
which case you'd want to move into design rather than assembly.

I think eg. Foxcon is going to be a very temporary thing.

I always thought that at some point a robot arm will be cheaper than a human
to assemble electronics.. but we may skip that stage altogether. Pretty soon
you'll just print your iPhone, bypassing assembly completely.

~~~
nitrogen
3D printing electronics from the transistor (or even IC) up is a _very long_
way away. Centralized manufacturing will exist for a long time. ICs are
significantly cheaper in quantities of 10k+, and there's no way a 3D printer
could generate a silicon wafer and etch a working circuit onto it, at least
not economically. Chip fabs still cost 10 figures.

------
cletus
This is going to be an increasing issue and it's something that Western
nations in particular just haven't had to deal with until now.

The West came out of Europe. Europe is small. To put it in perspective, the
distance from SF to NYC is ~2900 miles. The distance from London to _Baghdad_
is ~3100 miles. So abundance of land is not a problem the West has
traditionally had (not until colonization anyway).

Added to this, mortality has been high but population growth has been higher.
The last century saw a dramatic rise in life expectancy (primarily due to a
drop in infant mortality). The last 50 years has seen a dramatic drop in
population growth (the lesson seems to be that the natural reaction to
uncertain times by people is to breed more).

So the West is being crushed by the weight of supporting an ageing population
from a system established at a time retirement was a rarity.

Add to this to overall trend of the last century has been one of urbanization.

And just to put the nail in the coffin, low-tech manufacturing has largely
fled the West for the developing world where labour is cheap.

Our entire society seems premised on both population and economic growth. What
exactly do we do when the population starts shrinking? This is a bridge we
haven't crossed yet.

The experience in parts of the US seem to indicate the transition won't be an
easy one. Cities with negative population growth have suffered from appalling
crime and poverty that seems much harder to flush out in a city full of vacant
buildings.

The ongoing story of Detroit is nothing short of surreal. That's a city that
is slowly being reclaimed by nature, which is really what should happen. Half-
empty cities are not healthy cities.

Now add to this the whole concept of home ownership. Home ownership is
aspirational. It's political goal. Home ownership comes with a huge cost
however.

\- The unlucky who buy in declining cities have a huge part of their wealth
eroded leading to virtually impoverished retirement.

\- It leads to an inflexible labour market (people are unwilling or unable to
move to where the jobs are).

\- It has a snowball effect, particularly in the US, where much of the funding
for local infrastructure comes from property taxes.

I haven't been to upstate New York. I'm one of those living in NYC where half
a million dollars for a studio doesn't seem that outrageous.

If there's one lesson from this is that everything is transitory. I believe
one of the largest fallacies of the Twentieth Century was that the idea set in
that everything was going to keep growing and keep getting better forever. The
institutions you grew up with would last a life time.

Hell, this even applies to climate where we base our views on a ridiculously
narrow band of Earth's or even human history.

Cities come. Cities go. Nations come. Nations go. To think that the USA or
Europe will exist as they do today a thousand years from now is the height of
hubris and/or naivete.

~~~
baby
I had to google it, might be useful for others:

2900 miles = 4667km

3100 miles = 4988km

~~~
biot
It could have read 2900 gribloops vs 3100 gribloops and, not knowing anything
about gribloops other than it's a measure of distance between cities, the
expected conclusion is the same: the two pairs of cities are roughly the same
distance apart. Ergo, converting the units presents no additional information.

~~~
lostlogin
It put things into a frame I understand though.

~~~
Maert
You don't understand the concept of somewhat longer units of length than those
you are used to?

------
simonsarris
(This is more of a response to several of the comments posted so far.)

I'd like to come to the defense of low-cost living but also acknowledge that
(expensive) city living has its obvious pluses that people already in SV might
be taking for granted.

I created a low-cost living situation while living in a big (old/pretty) house
in New Hampshire by renting out all of the rooms to friends. My rent is "free"
and utilities are split 5 ways ($50 per person in summer, $150 in winter.
Heating the house is expensive). If you can stand living with other people, I
think this is one of the better ways to bootstrap "new job out of college"
money instead of putting a down-payment on a smaller home that might not bring
in any cash.

The house just so happens to be the house I grew up in, which my father sold
in 2005 and foreclosed on in 2010 (ultra-conveniently, the year I graduated
from college). It needed _lots_ of work, so instead of trying to (re)sell it
for cheap I made a deal to fix it up while living in it for reduced rent.
Three friends living there cover the rent.

The house may be worth more in the future than current rates, and certainly
has its share of things-needing-fixing, and my friends pay below-market rent
rates, so it seems like a good deal for everyone involved.

If I did not have such a house, I think I'd try to buy one and do the same
thing. It's nice to have some communal society around after college. (I've
planned other things in my life to try to re-create that, too, because I think
its important and under-acknowledged.)

~~~

It's worth noting that there are downsides to living in a lower-cost-than-
SV/Major City area. I don't have _any_ programmer friends in real life outside
of the people at my work (a _very_ tiny company, and no one is remotely near
my age (24)). That becomes a little problematic. I'm reminded of a quote from
John le Carre:

> Coming home from very lonely places, all of us go a little mad: whether from
> great personal success, or just an all-night drive, we are the sole
> survivors of a world no one else has ever seen.

It's hard to talk about programming things and I think that's bad. I'm not
around as many career-driven people as I'd like to be either and I think
that's bad too. I end up spending a lot of time on the internet to talk about
those areas of my interest. (And especially HN: I have a lot of affection for
the repeated names in this place, even if we all tend to be a tad too
negative. Consistent commentors still make a community and I'm thankful for
that. Really.)

So it's a good setup. And while my salary isn't amazing it's more than enough
for my area, and I love my walkable, lovable hometown in New Hampshire. But
there's certainly something to be said for cities and high cost areas. I miss
being around as many smart people as there were in college.

~~~

On a note actually related to the article, when I drove around western NY -
went to college at RPI, near Albany and headed west for Craigslist ventures -
the places I saw just seemed surreal. Some parts of western NY, if you were
just dropped there with no context, you'd think to yourself "A war must have
happened here maybe 30 years ago". Strange levels of decay and halted-/de-
construction

~~~
cmbaus
I think I've seen your posts on this topic here before. I actually lived in a
shared housing situation in a large victorian mansion in Epping, NH in my 20s.
I really enjoyed it. I wanted to do the same thing when I moved to Tahoe as
the owner, but couldn't afford a house big enough to make it work out.

If I was in my 20s and working in an area as engineer with a reasonable cost
of living, I would seriously consider this exact thing. When you are just out
of school it is actually nice to be able to share a living space and it makes
economic sense.

~~~
xyzzy123
Where I come from, it's so common we have a word for it: flatting.

Almost everybody lives in flats for at least the first few years after leaving
home, and often much longer.

------
gridmaths
I zoomed in on google map, was hoping for streetview [ in which I fantasized
seeing Jack Reacher walk past for some reason ]

From the OP, I assumed this would be literally 100 miles from the nearest
drugstore/711.. but its bang in the urban grid of a small town.

Shouldn't some of the bailout money be towards loans for people to do up cheap
homes like this? It would seem a good investment for the future at low cost to
enable more people to pick up these low end deals. Are the banks now so stupid
they cant get people into homes and paying interest.. instead of this
foreclosure fire-sale nonsense ?

Assuming this place can get internet installed, it would make some family a
great home which they could gradually renovate, after which they would look
after the place and contribute to the town.

~~~
userulluipeste
Such bailouts and programs for average Joe don't really work. When real estate
price is in decline, housing becomes in time more affordable. In this
conditions you may actually get a chance to buy a house without a loan. It's a
natural evolution. Now suppose the government steps in, throwing easy money -
what do you think will happen next? I don't live in USA, I live in Romania,
EU. Here the real estate prices jumped threefold after the government started
„the first home” (literal translation) - a program that wanted to support
young families in getting a home. I don't say there weren't any benefits for
involved parties - the program actually spurred a lot of construction around,
the banks made a lot of profits, and some young selected couples had in the
end the privilege to be supported in buying overpriced living places. For
everyone else (most of us) the entire thing made the housing more expensive. I
don't want to see such things happen again.

------
ccleve
I left Western NY decades ago, a small town 60 miles from Buffalo, because
there was nothing there for me. It's not a place for software entrepreneurs.
But now, as I struggle with costs in downtown Chicago, I wonder if there's
some way to make something of the old place.

The answer is no, unless you can attract the right people there, and for that
there has to be a good job and at least few amenities. Both can be created,
but only if lightning strikes. It's a tough situation.

~~~
joonix
a) Chicago is pretty cheap.

b) Why do you have to be downtown? There are lots of suburbs and regional
towns connected with good rail.

------
michaelochurch
Location is basically an extortion racket enabled by the economic collapse of
the U.S. outside of a handful of star cities. With NIMBY policies, people in
economically vibrant locations keep supply artificially low. This way, a class
of people who've ceased providing value can still enrich themselves on a self-
sustaining pattern of clueless talent rushing in for the gold rush.

What we see is that most of the country is dying-- that's why the real estate
is so cheap in places like Jamestown-- but that's driving the costs in the few
not-dying stretches to obscene levels.

~~~
waps
The problem is that this is happening everywhere, not just the US. Everything
outside the main cities is becoming more and more worthless.

That will switch when oil becomes cheap again. Of course, that may never
happen.

