
A Growing Problem in Real Estate: Too Many Too Big Houses - ryan_j_naughton
https://www.wsj.com/articles/a-growing-problem-in-real-estate-too-many-too-big-houses-11553181782?mod=rsswn
======
hn_throwaway_99
One of the trends that I can only hope continues is getting rid of this idea
that home ownership (especially single family home ownership) is the American
dream.

I live in and own a detached single family home (was a compromise with my
spouse) and to be honest, I hate it. I hate having to take care of the yard,
to deal with unreliable tradespeople when things break, to deal with the huge
expense of minor home repairs - and this is even after outsourcing as much of
that work as possible.

Compare that to renting an apartment, which I loved. If something broke, I
just called the super, and that was that. This ridiculous idea that renting is
"throwing money away" is absurd. I'm paying someone to deal with all the shit
I absolutely don't want to deal with, and more importantly I'm paying for the
freedom to easily up and move if something else fits my fancy.

~~~
maxsilver
I also hate maintaining a detached single family home with a yard. I also hate
being responsible for the fixes. But that situation is still far better than
renting.

When we rented, we were subjected to eviction at any time, for nearly any
reason, for basically no notice (60 days, which in the US is effectively zero
notice). Your subjected to every whim the crazy wildly-irrational housing
market throws at you (we've had 12% yearly rental increases for _a decade
straight_ now, despite living in bumblefudge-nowhere Midwest).

Renting in the US today is capital-e Evil, and just wholly broken. Unless
we're ready to implement some guaranteed nationwide rent controls and
guarantees against unjust eviction and harassment, making housing ownership
possible for all citizens has to be the number 1 goal. Because home/condo
ownership is the only way to gain any sort of housing security in most of the
USA today.

~~~
Balgair
> we've had 12% yearly rental increases for a decade straight now, despite
> living in bumblefudge-nowhere Midwest

Quick math for the rest of you out there: That means they paid 1000 in 2009
and now pay ~3500 in 2019.

Also, yes, I feel you there. Our rental agreement states a mandatory 10%
increase if you rent from year to year. I've no idea why the company is this
stupid though. The rents around us are falling or staying steady these days.
So we just move to the block over every year and the old place stays empty for
3 months before then being rented out for the same or less than we paid. I'm
sure there is some tax thing involved here that makes it so they don't have to
care all that much.

Also, yeah, we don't have a lot, and we can just move houses in about a
weekend in my 4-door.

~~~
andechs
It's similar to a telecommunications giant - as the customer, you need to pay
a cost of switching (moving expenses, hookup fees etc.).

So it's in their best interests to try to squeeze customers when possible,
even with the occasional person that moves out, they'll net a lot more from
tenants who just don't bother to dispute the increase.

~~~
Balgair
True! We've decided to be nimble, and it does take a toll (no pool tables, no
big patio furniture, smaller couches, etc). But saving the cash is worth it to
us. 12% on 1000k/mo rent comes out to an extra 1440/year that could be saved.
To us, such a thing is worth the weekend of moving hell.

~~~
malvosenior
Don't you also lose a lot of the deposit money you put down on the old
apartment and the services that went along with it though? Not to mention that
moving is more than a weekend of shuttling around possessions (if you don't
own much), you also have to change your address with everyone, sign up for new
utilities... I always burn a lot of money and time when moving.

~~~
Balgair
> Don't you also lose a lot of the deposit money you put down on the old
> apartment and the services that went along with it though?

Wait, what? It's a deposit, you get it back at the end of the lease.

Like, granted, if you have a lot of damage to the carpets, sure, you're gonna
be out $80 for the cleaning of them. But I've always gotten it back in full
after a month or so.

For me, moving is litterally a weekend (maybe including a Friday afternoon).
We really don't have much to move. I'm not joking.

Also, my state allows you to just forward the mail to the new address for
free. It only lasts a year, but you can re-up that at any time. We've just
done that without much worry and we also have a lot of online stuff that works
through the phones and whatnot.

I guess I'm just old hat at doing this kinda moving stuff. It's not much
stress for me, though you are right, it is some extra stress. For us, it's
worth the savings.

~~~
malvosenior
In my experience I lose hundreds on my deposit every time (with very little
actual wear to validate that loss). I've only ever rented in major cities
though, so maybe it's less aggressively slum-lordy elsewhere.

If you do have more possessions than you can move yourself, or your moving
long distances, you end up spending a _ton_ of money. Movers usually cost me
5-10k and I didn't even have a lot of stuff (2bd apartment worth of
possessions). Ditto if you need your car(s) moved.

~~~
Balgair
> Movers usually cost me 5-10k

Wow! That is insane!

Here it's about $800 for anything less than 3 hours each way per truck load.
And I think that is a rip-off. I've seen college towns that'll charge $50 for
frat bros to move you about town all said and done (but then again a frat bro
is moving your TV, so beware).

------
pjc50
This is not only "first world problems", but 1% first world problems. Well,
maybe 5%: given

> For their retirement in a suburb of Asheville, N.C., Ben and Valentina
> Bethell spent about $3.5 million in 2009 to build their dream home: a
> roughly 7,500-square-foot, European-style house with a commanding view of
> the Blue Ridge Mountains.

Put $3.5m into [https://dqydj.com/net-worth-percentile-calculator-united-
sta...](https://dqydj.com/net-worth-percentile-calculator-united-states/) and
you find that they are at least in the 96.5 percentile. (They are unlikely to
have mortgaged it, as most lenders won't lend past retirement for obvious
reasons)

The house is 700 (seven hundred) square meters. By comparison, London is
banning the construction of "mega homes" over 150m2 in an attempt to prevent
hypergentrification by oligarchs. These people in the article are the wealthy
who haven't noticed that the ladder has fallen away behind them leaving nobody
to buy their mansion.

~~~
alkonaut
I don't get why you'd want to build an enormous house for your _retirement_?
If anything, I long for the day my kids leave and I can move to a "simpler"
place where I don't need to worry about, or pay for, maintainnig a detatched
house.

What does a rich older couple do in 7500sq ft/700sq m? I'd run out of ideas
for rooms after about 200 sq m, and then I'm left to clean the remaining 500
sq m. anyway...

~~~
alistairSH
Right there with you. We sold our 1800sqft single-family for a 1500sqft
townhome shortly after the kid flew the nest. And we still have two bedrooms
that are seldom used (one is a guest room, used 3-4x/year, the other is an
office used never, except by the dog).

~~~
snissn
awww.. what kind of job does the dog have?

~~~
mst
Hard to tell given the number of industries that allow Woof From Home these
days.

------
rdiddly
On one of my harder-hearted days I would've felt schadenfreude (rich assholes
waste obscene amounts of money on tacky shit, get burned, film at 11), but
today I feel sorry for them. The whole thing is just sad. On the macro level,
such a tragic mis-deployment of resources. And on the micro level, misplacing
one's priorities on material things and finding out the hard way that it
doesn't bring any meaning to your life. I know someone going through this now
in a more modest house... slowly but surely, starting to get tired earlier and
earlier in the afternoons (granted, she smokes), getting sick of chores like
cleaning gutters, mowing, clearing spiderwebs etc.

And all those empty rooms in the photographs! I don't imagine they see many
days of being filled with smiling, laughing guests. Which is really the only
true use of a house that big... you need to entertain, you need hundreds of
friends to share it with, right? Otherwise what's the use? Maybe that's just
me. I would probably get supremely depressed otherwise, all that space around
me, waiting to be used, reminding me how empty it is.

Everybody gets old. Everybody dies. Everybody follows each other in a grand
parade to oblivion. These people won the game the mid-20th century told them
was being played, but everybody ultimately loses the Big Game.

~~~
module0000
> Everybody follows each other in a grand parade to oblivion.

You sir, are a genius. I love that wording. That should have been on the
welcome brochure we all get as babies, assuming we could read it.

~~~
pram
I mean, that’s a pretty common theme in the Bible:

As one dies, so dies the other—they all have the same breath. Man has no
advantage over the animals, since everything is futile. All go to one place:
All come from dust, and all return to dust.

~~~
FearNotDaniel
> I mean, that’s a pretty common theme in the Bible

Actually, it isn't. The book of Ecclesiastes, which you quoted, goes very much
against the grain of the rest of the Bible, which generally tends more towards
the idea that man is distinct from the animals, and does have a higher
purpose, which is to serve God. Ask any Bible-thumping evangelical and they
will be very quick to tell you that all do not go to one place, because their
whole raison d'etre is to persuade you that if you don't follow exactly
whatever particular flavour of Christianity they are pushing, then you will
end up going to a very bad place indeed whereas they, of course are already
assured of their entry into a not-so-bad place for all eternity. They will
also tell you that the Bible never contradicts itself. I leave you to draw
your own conclusions.

------
pbuzbee
This article claims that these homes are going because buyer preferences have
shifted towards smaller homes in walkable areas. I don't disagree with this,
but I'm surprised the article didn't factor in the cost of these homes.

These homes are priced in the millions and are generally not in areas known
for high salaries. Coming up with that much money is out of reach for most
members of younger generations. Some people may be interested in buying these
gargantuan homes, but they can't afford it.

And as the article states, the generation that can most afford these homes,
boomers, is losing interest in these homes because they are coming to terms
with how impractical they are as they age.

~~~
munificent
I hate to sound so cynical and negative, but, God, this article is really just
a case study in how stupid, materialistic, and short-sighted many Boomers are.

That generation was raised on the idea that happiness comes from owning as
many things as possible. They've had decades to learn — like the generations
after them did — that this is nonsense and that happiness comes from
connection to family, friends, and community.

But, instead, some segment of them still build giant empty monoliths to
consumerism out in the middle of nowhere and then get surprised when they
discover that they are still old and approaching death and that they still
don't feel good.

~~~
taurath
They had a 5000 square foot house BUILT when they were _82_ \- more money than
sense.

------
Theodores
What gets me is the absence of ballrooms. Yes, ballrooms.

In former times grand mansions would have a ballroom. There would be hundreds
of people or even just modest gatherings of thirty people, which could be just
a few families with a huge amount of kids each.

But the McMansions never seem to have a ballroom. There may be vast swimming
pools and all kinds of huge extra bedrooms but they lack the fantasy aspect
that goes with a grand ball.

The grand ball could be a wedding or a birthday or just a seasonal event.
People would have to dress up for it in very impractical clothes. A certain
level of class hierarchy goes with it though, not very American doing that.

I can't remember which one, but years ago the English king would not really
use the grand palaces but stay in a regular house in the grounds. He just
preferred everything on a practical scale. I think I would be the same had I
been born with parents with one of these McMansions, for them to pass the
behemoth on to me. The place would have to be in some storage mode and I would
live in some small one room caravan out the back, to only use the big house
when guests arrive.

How does the heating work out for these McMansions? I don't see a lot of
doors. Do these people just have huge electricity and other bills to keep the
lights and HVAC on the whole time?

~~~
taurath
Because these are not estates (which might own a lot of land, have vassals,
and have economic and social connections to the surrounding area), so there is
nobody to use the ballrooms, even if they invited everyone they knew. Its
cargoculting for the rich with no sense whatsoever.

------
taurath
I have a group of very close friends that I've lived with off and on for the
better part of 15 years - this allows us to sort of "hack" the system, buy up
a very extra large house and just have more or less a communal living
environment, out in the suburbs. The biggest issue is parking in a cul-de-sac,
but currently its a 3600 sq foot house with 7 people living in it - 2
kitchens.

TBH, its great, especially when you compare what you can get for the same
mortgage in the city, where even a 2 bedroom is considered too big. Anything
over 2.5k sq feet in the city is either a triplex (and thereby 3x as expensive
per sq foot), or a mansion that costs >$500/sq foot.

We get to have nice amenities like a hot tub, gym room, etc, and not feel like
we have "too much" stuff because almost everything is actually used. It
wouldn't work if we wanted to have kids of course, but we're pretty much all
lgbt. The social group also has to be not only tight, but also already has
good way of dealing with conflict.

------
imgabe
Why is this a problem? Some very rich people become a little bit less rich.
None of them seem to be in danger of falling into penury over only getting $1M
for their house instead of $2M. Sounds like the supply and demand working the
way they're supposed to.

~~~
tomatocracy
At a macro level and over the long term, even if prices fall and this means
that slightly less rich people can buy them instead, big houses are more
expensive and more work to look after and maintain and there is a limit to the
number of people willing and able to do that. The ultimate end result could be
that some of these houses become derelict, which isn’t really good for anyone.

This is what happened to a good number of the large country houses in England
after food prices fell in the late 19th and early 20th century.

~~~
0xDEFC0DE
Knock $10-20k off the price and put that towards hiring people to clean it.
Bundle the house sale with cleaning services for a few years or something. The
amount of people willing to deal with it will grow as the price falls, but
that's not newsworthy. That's the uncomfortable truth for people wanting to
sell.

~~~
kevin_thibedeau
There's still energy costs wasted on heating and cooling 4x more space than
you need.

~~~
tomatocracy
Not just energy costs - replacements for kitchen/bathroom fittings as they
fail, painting/decorating, cleaning, basic maintenance to ensure the place
doesn’t fall down, keeping gardens from becoming overgrown, the list goes on.

------
SwellJoe
Several of my younger friends live in cooperative housing, where they rent a
big house, and individually rent out the rooms. Sometimes as many as 8 or 10
people live in a "single family" home. This seems like a great solution for
all parties involved (including cities with very high rents), until you learn
that the cities they're in often consider this an illegal use of the property
and will force their landlord to evict them on short notice if neighbors
complain. And, because it's technically an "illegal" living situation, they
don't get a lot of the same protections they'd get if they were "legal"
tenants. So, leases are kinda meaningless, if the landlord can evict at any
time.

It's a sort of housing insecurity that makes their lives a lot more stressful
than anyone should have to deal with, and it gives landlords a dangerous
amount of leverage over tenants (they charge more, knowing it's being used by
multiple tenants, but they'll claim lack of knowledge when the neighbors
complain and the city comes knocking). And, of course, they'll ignore the
lease if they get a buy offer that they don't want to say no to.

Cities, especially those experiencing dramatic rent increases and that have a
history of only allowing single-family homes in much of their livable land (as
most US cities do), need to remove zoning impediments to multi-family housing.
There was a project published a couple days ago to map the zoning in a bunch
of major cities, and it's eye-opening how tiny the available space for multi-
family dwellings is in a lot of them, and it makes it make sense that there is
a housing crisis in a lot of major cities. Maps are here:
[https://www.nytimes.com/interactive/2019/06/18/upshot/cities...](https://www.nytimes.com/interactive/2019/06/18/upshot/cities-
across-america-question-single-family-zoning.html?module=inline)

Of course, that won't solve the too-big-too-far houses. The other problem with
a lot of McMansions is that they were built in the middle of nowhere. Younger
people want shorter commutes, the ability to bike or take mass transit, a
neighborhood with shopping in walking distance, etc. People have figured out
that quality of life in cities is just plain better than suburban life.

~~~
secabeen
There's fun history to that here in California. There was an older woman here
in Santa Barbara that ran a house like that. Lots of rented out rooms, they
ate communal dinners, but you didn't have to come, etc. The city tried to shut
it down, she took it to the state Supreme court, where they ruled in the
homeowners' favor, saying essentially "the city doesn't get to decide what a
family is. If these people want to call themselves a family, then they are a
family, and this is a single-family home."

As such, the restrictions now are on separate dwellings, as defined more by
number of kitchens, sub-dividability, etc., not number of people.

~~~
SwellJoe
I just finished watching _Tales of the City_ (the new one on Netflix), and
that sounds lovely.

------
wayoutthere
At least in my area, the cost of permitting and labor is such that it’s simply
not worth building a house unless you can sell it for over $500k. Which means
they’re _only_ building large, 4 bedroom houses, most in the $750k range. The
vast majority of prospective homebuyers cannot qualify for a loan that big.

Meanwhile the rent on a 2 bedroom apartment is more than a mortgage on one of
those houses. So guess why so many people are renting?

------
Vizarddesky
Are we supposed to be sympathetic to the “problems” these people are facing
selling their overpriced real estate? My only regret is that they’re not
getting screwed over harder.

~~~
rcar1046
You wish hardship upon them because...why exactly?

~~~
TheOtherHobbes
Because in real terms it may not be real hardship so much as inconvenience -
unless they're hugely indebted, which then makes it a much bigger problem for
everyone.

But also because done the right way, it could help alleviate real hardship
elsewhere.

~~~
atonse
Not sure how them having to sell their house for $1m less would somehow
alleviate hardship elsewhere. It's not like it would go into taxes or
something.

------
Blackstone4
We have a similar issue in the UK since there are large houses being occupied
by older couples whose children have left. Since annual property taxes are low
(~4k - we call it council tax) and tax on buying property (stamp duty) is
high, there is no incentive to move to a smaller place.

~~~
eertami
Equating council tax with property tax is extremely misleading imo.

For the benefit of people not from the UK: Council tax is effectively a bill
for services & utilities paid by the occupier. Cost differs slightly based on
overall property value but that's not super helpful for renters.

Property taxes would be levied on the owner, and be directly tied to house
value.

For what it's worth I believe we desperately need property taxes to put and
end to the situation you describe, amongst others.

But the UK has a fetish for homeownership, culturally people are convinced
they _must_ own a house or multiple, and so many homes were practically given
away for free by past governments.

Any Government trying to implement policies that try to fix our housing crisis
will be voted out almost instantly by a class of people who do not care what
is for the public good, only that things benefit them.

~~~
Blackstone4
I feel that it was not "extremely misleading" within the given context which
referenced older couples in larger properties. In this case, they are the ones
typically paying the council tax.

I agree with you that the UK needs property taxes to be paid for by the
owners. This would help reduce speculation and encourage utilisation of the
existing housing stock. But as another post has mentioned, objections include
"think of the old people who are worth $1m+ in property but would have to move
out because they have low income"....boohoo...

~~~
smcl
You need to be careful when dismissing caution about the elderly who have -
through whatever means - found themselves living in a valuable property. The
following are just as likely:

\- a wealthy individual with many properties who can easily afford a few extra
hundred quid a month

\- someone living just above poverty level in a property in a previously
modest area that, thanks to a gentrification, has exploded in value - and
would to move out if their tax band was bumped up a bit

We cannot just dismiss the plight of the latter simply because we want to
disincentivise the former.

I'd like to add that the vulnerable (including but not limited to - elderly,
long-term unemployed, immigrants, disabled) in the UK have already had to deal
with cuts in local services as well as periodically being labelled by the
government and the press as lazy or pathetic or scroungers. I'd encourage
anyone to resist anything that could be used to further victimize or
immiserate them - even if it is just in the form of a casual tweet or comment.

Edit: My last paragraph really sounds a little harsh on re-reading. This is
because it was meant to be an "as an aside" comment and _not_ accusing
Blackstone4 of anything sinister! I'm generally in favour of taxing the rich
and powerful.

~~~
TheOtherHobbes
I think if someone is in a huge house they're barely using and possibly not
even maintaining, there isn't a massive issue with gently incentivising them
to move somewhere smaller.

There _especially_ isn't an issue with a redistributive land tax rather than a
property tax. That would take money from corporate landlords and move it back
into the rest of the economy.

You have to balance your caution with the reality at the other end - which is
people living in slum conditions and/or sheds, or being homeless.

~~~
smcl
If it’s a case of seizing unused or poorly maintained mansions from the super-
rich and turning them into Council houses then I am on board. But to me it
sounded like we were talking about old people living alone in 3-bedroom houses
they used to stay with their families

------
chrisBob
I built a house last year, and had to work with a few different banks to
finally get a construction loan. One of the fist ones said to me "1900 sq-ft?
You shouldn't be building a house that small".

We made it work, but would have gone with a manufactured home before we would
have built something with 3k+ square feet just to make the bank happy.

~~~
jawns
I would assume the first bank advised against it, and the other banks passed
on it, is because they need to think not only about whether you can be
expected to repay the loan, but also about how easy it is going to be to
offload the property if you can't afford the loan and they need to foreclose.

Yes, YOU might be perfectly happy in a 1,900 square foot home, but if the
market demand is for houses significantly larger, then you, or the bank, might
find it (relatively) hard to find a buyer if you ever need to sell.

~~~
BeetleB
I was about to say the same. I know someone in the Salt Lake City area who
built his own home. His realtor told him "You can build what you want, but a
house with 4 bedrooms will not sell well".

People have a lot of kids there.

------
bfrog
Well the solution is communal living in these large homes. I'm doing just such
a thing with extended family and children and its quite nice.

I get not everyone loves being around their family, so its not for everyone,
but it makes things far more affordable, and the house you can get by pooling
money together can be quite amazing compared to what you can get by splitting
the pot. There are fewer people wanting to buy these homes which means the
deals you can get are quite good.

~~~
kazen44
this is actually the classic use case of a real mansion.

Almost all old mansions, especially in Europe used to be owned by the
aristocracy, and they lived their with the entire (extended) family and
servants.

A 700m2 house is terrible to live in the place is inhabited by 2 people. 10 or
15 on the other hand, make living in such a home a completely different
experience.

------
segmondy
The property taxes are horrible too. They are the equivalent of a mortgage!
Older folks have the money, young people don't, most are struggling to afford
a mortgage, let alone taxes that is the equivalent for a mortgage. Not to talk
about the cost of heating/cooling such houses.

~~~
bwb
Other countries tax differently there, some do a upfront tax during the
purchase and then very little property tax.

------
dfischer
Insight into younger generations:

I hate the idea of owning property. I don't want to be stuck to a city or a
location. The world, and the universe have so much to offer. To me, buying a
house is cementing your location and stunting the amount of knowledge you can
acquire by handcuffing you to a location and limiting your exposure to the
world.

That is the philosophical side, then there's the debt and the overall asset
appreciation game that everyone else plays.

I have no interest in owning a home to settle down. If I do it, it would be to
exploit financial interests with the right opportunity. I think we can use a
radically different model for housing and what we consider livable spaces for
our species.

I'd love to see cities built around the Dunbar number and with transportation
making travel times easier, we can see some interesting designs. Foster
community and allow communication and personal reach across distances. This is
probably going to be forced by warehouse space in relation to live space.
We're going to need more and more land for manufacturing and storage of goods
compared to retail and shopping experiences. We'll have living communities
without much need to venture into markets. Markets will be VR, and many jobs
will be remote. Foster community with "villages" within a city that is related
to the Dunbar number.

~~~
lotsofpulp
Most people have the same thoughts (at least in the income class that can
afford to move around), until they have children and need a good school
district.

~~~
m463
Also theres the "That place was so expensive back then, but now I realize I
should have bought 2 of them"

~~~
dfischer
This has an interesting inheritance of why properties go up in value in
relation to supply and demand and an economy. If the needs of society are
pushed to an average of not needing to venture out anymore due to automation
and manufacturing + remote work then we start to focus internally on
community. If that's the case, how much does the location matter outside maybe
the view you're able to afford?

~~~
showerst
I'd argue that it matters _more_ in that case, because the returns to
clustering will be higher, and the non-work features (access to outdoors,
climate) will matter more.

I think in a world where you don't worry about jobs, and worry less about
living expenses, Boulder and San Diego and Manhattan get _more_ desirable.

~~~
dfischer
Why would they be more desirable?

~~~
showerst
(I hope i'm reading your hypothetical right) in a world where I don't have to
venture out to go to work, and don't have to live in a set place to chase an
industry, I'd put more value on being in a nice climate, close to fun things
to do, and near other people that have 'interesting' established communities
(walkable culture, food, know your neighbors, all the standard millennial
trend stuff).

I'm assuming a situation where I have more leisure time and less income
scarcity here.

There are some people who take the "given no constraints I'd move to flyover
country" but even then many of them are doing that because it's cheap, not
because it's the absolute most desirable right?

Strictly speaking you _could_ just plop a new city down from scratch in
Nebraska, but why would i live there when i could live somewhere where I go to
the beach or the mountains every weekend, and walk to a hopping established
strip of restaurants and coffee shops in 10 minutes?

~~~
souprock
Moving to flyover country is more than affordability. It's also a matter of
culture. Some people want stand-your-ground, constitutional carry, and lethal
defense of property. Some people want to be surrounded by a particular
religious group.

Affordability is also more than just being able to buy a place to live. People
want land. This can mean being able to hunt in the yard, own a private pond,
or walk around without seeing any sign of the existence of other humans on
Earth. Technically, there is some amount of money that would let you do that
kind of thing in San Francisco. It would start with funding political
campaigns, leading to a massive eminent domain wipe-out of the existing
city... but this is not realistic. In a practical sense, getting the space is
not a matter of affordability. You can't have that space for any realistic
cost.

~~~
madengr
Bingo. I live in a “constitution carry” state in flyover country. Currently on
travel in a heavy gun-control state that looks like a documentary on the
opioid epidemic. Can’t wait to get back.

~~~
showerst
I wasn't really thinking in terms of politics -- There's still a few hub
cities in conservative land that are the main places people live, right? More
people live in just the Houston metro area than in all of Missouri, despite
rural MO being cheaper and just as conservative.

I guess the point i'm trying to make is in regards to the original poster --
They posited that if people don't have to care about job locations and as much
about cost, real estate values in concentrated places would drop.

I'm arguing that if people could move anywhere they preferred, concentrated
places would get _more_ popular, because the gains you get living in currently
desirable places get more valuable the more time and money you have. Obviously
you have some people who's preference is to live somewhere isolated, but most
of those people don't currently live in expensive places. There are some
people who are holed up in San Diego and waiting until the day they can leave,
but that number is probably swamped by the people who'd move there in a
heartbeat if they could find a job that payed well enough.

Maybe my sample is skewed, but I'm from a small city in MO, most of my friends
are early 30s and starting to settle down and start families, and I know a lot
more people who would rather live in NYC/Boulder/Nashville/Dallas than either
where they live now, or somewhere more rural.

------
joyjoyjoy
Too Big To Sell

[https://moneymaven.io/mishtalk/economics/too-big-to-
sell-C9L...](https://moneymaven.io/mishtalk/economics/too-big-to-
sell-C9LM57-3i06ve1scg9x_ww/)

------
sys_64738
They're too expensive for buyers which means they're not being sold for the
going rate. If you divide the price by 5 then I'm sure people will come. Maybe
the people are underwater for their mortgage.

But mortgage outstanding != house selling price.

------
pmoriarty
There's a great documentary called _The Queen of Versailles_ about a rich
family who bought a McMansion shortly before the recession of 2008.

[https://dvd.netflix.com/Movie/The-Queen-of-
Versailles/702292...](https://dvd.netflix.com/Movie/The-Queen-of-
Versailles/70229267)

[https://en.wikipedia.org/wiki/The_Queen_of_Versailles](https://en.wikipedia.org/wiki/The_Queen_of_Versailles)

------
adrianmonk
Luxury items of any type are usually poor investments, for several reasons:

1\. Price range. By definition, you're above the normal price range. This
means fewer potential buyers, thus less liquidity.

2\. Over-specialized. The upgrades or enhancements that made it into a luxury
item, which were valuable to you, may not be valuable to someone else. You
will take a loss on features that are included but others don't care about.

3\. Experimental. People who make luxury items tend to include novel things
that sound nice but don't pan out and turn out to be useless or even
undesirable.

4\. Status. Luxury and status are often linked. Luxury buyers aren't too
excited about secondhand. A used sports car doesn't impress your friends like
a new one.

If you buy a luxury item (like a giant house), the most rational thing to do
is just accept that you are buying it because you want that luxury for
yourself, and don't expect to get the money out of it later.

------
partiallypro
I generally wonder what is going to happen to the real estate market once
retirees are forced to sell their homes to stay in nursing homes, or just pass
away, etc. The kids could inherit the homes, but that will still leave a flood
of houses on the market. It will be interesting to see play out.

~~~
BeetleB
>The kids could inherit the homes, but that will still leave a flood of houses
on the market. It will be interesting to see play out.

Investors will buy them, and get the city/county to rezone those properties
for multiple houses. They will tear the house down, and build N houses on it
and sell it.

In the short term, there might be a local HOA that will fight it. But when the
oversupply gets large enough to really impact everyone's prices, the existing
owners will favor this solution, as it will raise the value of their own
mansion.

~~~
partiallypro
Or it could be like Japan, and the real estate market is flat for decades. In
fact, Japanese median home prices are lower than they were in 1992. The stock
market had flat phases for decades in US history...I don't see why housing as
an asset class is immune to it.

------
cestith
A huge demographic is aging out of real estate ownership. There are far fewer
Gen Xers than Boomers. Even if Millennials had the same economy the Boomers
had, they're a full generation behind the Boomer's retirement curve.

So, yeah, there aren't as many people producing demand for these houses even
before considering different tastes in living style. It's a bad investment to
put your life's savings in something with a plan to resell it to a less
interested market. Either retire into it and get the use out of it or don't
put your money there.

The market is just correcting in a quite foreseeable way.

------
anbop
I moved from a 3500 square foot house to a 1400 square foot house with 3 kids
and my quality of life has not gone down at all. Threw out most of my stuff
out of necessity, haven’t needed it.

------
hycaria
Ah I always forget, what's the trick to read wsj articles again ?

~~~
docdeek
Outline.com - in this case:
[https://outline.com/SAJ7yR](https://outline.com/SAJ7yR)

~~~
hycaria
Thank you very much !

~~~
DennisP
Another way is to append "?mod=rsswn" to the URL.

------
thorwasdfasdf
I'm not the least bit surprised that no one is buying it. It sounds like they
got hugely ripped off "spent about $3.5 million in 2009 to build their dream
home: a roughly 7,500-square-foot, European-style house with a commanding view
of the Blue Ridge Mountains" That's ridiculous: almost 500$/sq foot. That's
almost bay area east bay pricing!

Why do that when you can go to Houston and get the same thing at 100$/sq foot?

------
jlj
Split them into multi-family houses. Cheap density increase, higher revenue to
the landlord, and more supply to soften housing costs for tenants.

------
willart4food
If they are Too Big they are also Too Big To fail, taxpayers money will rescue
those homeowners.

/s

------
santa_boy
Deviating perhaps ... but I always wonder if having a big house makes a family
happier or more efficient?

Small house have their own problems but bigger houses instinctively don't seem
to be the right solution to me.

------
Dirlewanger
Rich people upset upset at supply and demand: more at 11.

------
hsnewman
We built a 4200 sq/ft home 8 years ago, now trying to sell it in a gated
community. The more expensive homes around ours are selling, ours has sat for
over 3 months. We have alot of traffic seeing the house but because it doesn't
have all the extras (pool, outdoor kitchen, etc) people are not buying. Sad.

~~~
chrisan
Perhaps you need a further price adjustment to account for the lack of extras?

