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Why don't houses follow Moore's law?

By CL   Follow   Thu, 31 May 2012, 12:23pm   6,281 views   68 comments
In Emeryville CA 94608   Watch (2)   Share   Quote   Permalink   Like   Dislike  

There have been big advances in materials, labor saving devices and building technology. Why hasn't the price gone down for new SFH?

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1. B.A.C.A.H. Follow Befriend (6) 5 threads 2,359 comments

   29   10:17pm Thu 31 May 2012   Share   Quote   Permalink   Like (1)   Dislike   When Moore penned his paper describing what became his "law", there was silicon manufacturing in Silicon Valley on a massive scale with armies of employees in all ranks. One way to reduce the cost is the scale up the manufacturing on a massive scale, to do it with local government giveaways, tax deals, etc., and for extra cost savings, do it in places with lower pay. First, exploit those giveaways to relocate to lower cost states like New Mexico, etc., then Japan, Taiwan, finally Communist China. So there's a way to Moore's Law your housing cost just like the semiconductor manufacturing did to reduce its "cost per component": leave the Bay Area.

2. zzyzzx Follow Befriend (9) 414 threads 4,133 comments Baltimore, MD

   30   5:52am Fri 1 Jun 2012   Share   Quote   Permalink   Like   Dislike   For one thing, hasn't the cost of the raw materials risen over the years (even though the quality of the materials have dropped substantially).

3. taxee Follow Befriend 88 threads 457 comments El Cerrito, CA Premium

   31   8:22am Fri 1 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike (1)   Protected   Business is war. In 1973 the world reserve currency became a totally fiat creation. As a result the bullets (dollars/credit) are now distributed (or withheld) to the competing parties in any way the issuing bodies see fit. Having unlimited funds with which to motivate and choose winners and losers, the only thing important is that others not have enough.

4. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

   32   8:26am Fri 1 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   CL says Technology should have ushered in a new era of cheap and easy to build houses, with prices falling as it did in chips. Why hasn't it? It has. They're called "mobile homes." And modular homes. The quality of the latter is getting better. CL says Why do we pay so much for small boxes, especially in the Bay Area, 70 or 80 years old, with knob and tube wiring and a converted garage for your mother-in-law? You have to pay so much to fight off the other humans who covet that same parcel of dirt. Location location location. In places like Houston, there are less humans to fight off since there is so much land available. So your money goes toward mainly house construction rather than economic warfare against other humans.

5. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

   33   8:29am Fri 1 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike   Protected   Patrick says Given that worker productivity has increased so much over the last decades, why is it that we still have to work 40 hours per week? Because Jesus says if you don't spend most of your time working, you'll go to Hell. And if you're a Calvinist, you have to work constantly to prove you're a member of God's Elect. We're God's Chosen Nation (tm), remember? It says so in the Bible.

6. YesYNot Follow Befriend (2) 15 threads 429 comments Reston, VA

   34   8:56am Fri 1 Jun 2012   Share   Quote   Permalink   Like   Dislike   Why don't houses follow Moore's law? Because they are not semiconductors? Semiconductors were 10^5 times as slow in 1975 as they are now. Can you imagine if houses were 10^5 times as small or 10^5 times as expensive in 1975 as they are now? 1975 would have sucked.

7. taxee Follow Befriend 88 threads 457 comments El Cerrito, CA Premium

   35   9:47am Fri 1 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected

8. Vicente Follow Befriend (8) 203 threads 4,410 comments Davis, CA

   36   12:05am Sat 2 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Because making housing cheaper does not sell more houses and realize more profits. Keeping prices propped up enables all the fee extracting machinery.

9. Auntiegrav Follow Befriend (5) 7 threads 228 comments Belgium, WI Premium

   37   5:22am Sat 2 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike   Protected   Vicente says Because making housing cheaper does not sell more houses and realize more profits. Keeping prices propped up enables all the fee extracting machinery. “Eagles are dandified vultures” - Teddy Roosevelt The point to accumulating wealth is to play Keep Away from the weaker kids in the playground. That's how it stays valuable. Once you let everyone have a fair shot at touching the ball, it's just kickball again and the fun gets spread around. The ball is only valuable if someone ELSE really WANTS it and can't GET it.

10. thunderlips11 Follow Befriend (13) 51 threads 2,636 comments Premium

    38   8:27am Wed 6 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Patrick says Given that worker productivity has increased so much over the last decades, why is it that we still have to work 40 hours per week? Good Question. Increased Productivity should lead to greatly expanding wages or less work hours at same pay. Neither has happened - but the top 1% captured a bigger chunk of the national income.

11. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

    39   2:21pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   zzyzzx says For one thing, hasn't the cost of the raw materials risen over the years (even though the quality of the materials have dropped substantially). nope! they are down, have been, in a very big way.

12. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

    40   2:23pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   thunderlips11 says Good Question. Increased Productivity should lead to greatly expanding wages or less work hours at same pay. Neither has happened Today we compete on a global basis. They cut their prices, we cut our prices, and both have to keep expenses in check.

13. oddhack Follow Befriend 110 comments

    41   2:42pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Reminds me of a decades-old saying to the effect of "If cars evolved like semiconductors, a commuter sedan would cost $100, go 300 MPH at 500 MPG, and blow up every couple of days killing everyone on board."

14. SiO2 Follow Befriend 3 threads 189 comments

    42   3:04pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Patrick says Given that worker productivity has increased so much over the last decades, why is it that we still have to work 40 hours per week? Patrick, this is a really interesting question. Part of it is surely as you say, that as productivity increases, some of that will go to the land owner, since many people are competing over the same piece of land. but part of it also is that we as humans aren't satisfied with living as we did 40 years ago. So, given that we can work 40+ hours per week, we do, in order to have such conveniences. It's common to have 2 cars or more per family, cable tv, multiple computers, internet, take more elaborate vacations or children's activities, more expensive health care, and otherwise purchase more items or services than in the past. I've not done the math but I wonder how much it would cost to actually live 1972 style vs now: 1 car, fairly bare bones. Considering the longer lifespan of modern cars, even if a car costs more it could be less expensive in the long run due to longevity and fewer repairs. 1 tv, with rabbit ears smaller house, no a/c relatively few consumer goods The math probably breaks down in the Bay Area as housing expenses are so much higher compared to daily living expenses, but perhaps in other parts of the US one could actually work less if willing to live in such a way, thereby turning the greater productivity into fewer hours, instead of more stuff or services.

15. CL Follow Befriend (12) 140 threads 1,355 comments Emeryville, CA

    43   5:21pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Prices should follow normal economic laws and either decrease in price (especially for used houses, adding or subtracting for improvements or degradation). Then one would make the decision if they wanted a previously-owned house or brand new. New house is 200K, used is 150K, since the owners have taken some of the value off through age and wear and tear. Builders should be competing for ever-shrinking margins, too. And they shouldn't stop until the market is saturated with houses, ownership reaching critical mass, and the profit down to where some builders ahve decided it's not worth it. Like PCs. If houses followed traditional laws of economics, right?

16. Auntiegrav Follow Befriend (5) 7 threads 228 comments Belgium, WI Premium

    44   5:36pm Wed 6 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   CL says There have been big advances in materials, labor saving devices and building technology. Why hasn't the price gone down for new SFH? Because the price of everything else (computers, BBQ grills, Jetskis, garages, etc) have come down (especially inflation-keyed) so that people have to buy BIGGER houses to store all of their Stuff. More stuff, bigger houses, empty house?: buy more stuff. See how that works? If people stop buying bigger houses to buy more stuff, then the government steps in and gives houses away (low interest rates). (Yes, I know that technically, the Fed isn't the gov't, but when was the last time you saw our gov't do anything without the corporations? We don't have to worry about the fascists (corporates) taking over the gov't: the gov't sold itself to them long ago....somewhere around 1492, I think.)

17. Dan8267 Follow Befriend (16) 763 threads 7,706 comments Boca Raton, FL Premium

    45   5:45pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   Patrick says Given that worker productivity has increased so much over the last decades, why is it that we still have to work 40 hours per week? 40-hour work week? You get paid by the hour? The rest of us are working 50-75% overtime unpaid! I'd be happy to work only 40 hours a week.

18. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

    46   7:01pm Wed 6 Jun 2012   Share   Quote   Permalink   Like   Dislike   SiO2 says Considering the longer lifespan of modern cars, even if a car costs more it could be less expensive in the long run due to longevity and fewer repairs. Dont buy any British or Italian Cars made in the 70s -80s, unless you like to have repairing them as a hobby. Yes, I have an Alpha.. LOL!

19. SiO2 Follow Befriend 3 threads 189 comments

    47   8:00am Thu 7 Jun 2012   Share   Quote   Permalink   Like   Dislike   thomas.wong1986 says SiO2 says Considering the longer lifespan of modern cars, even if a car costs more it could be less expensive in the long run due to longevity and fewer repairs. Dont buy any British or Italian Cars made in the 70s -80s, unless you like to have repairing them as a hobby. Yes, I have an Alpha.. LOL! Well, yes, I am not talking about 30 year old Italian cars when I mention reliability. For fun, they are great. For daily trouble-free transportation...

20. unstoppable Follow Befriend 9 threads 86 comments Portland, OR

    48   8:05am Thu 7 Jun 2012   Share   Quote   Permalink   Like   Dislike   thomas.wong1986 says zzyzzx says For one thing, hasn't the cost of the raw materials risen over the years (even though the quality of the materials have dropped substantially). nope! they are down, have been, in a very big way. This graph is interesting but there is no control for quality. There is a vast difference in quality not to mention size between a 2x4 purchased in 1920 and the one you can pick up at home despot today.

21. CL Follow Befriend (12) 140 threads 1,355 comments Emeryville, CA

    49   10:26am Thu 7 Jun 2012   Share   Quote   Permalink   Like   Dislike   Let's say a new house costs 100K to build in the Midwest. 25K for materials, 25K for labor, 25K for land, 25K for fees, licensing, misc. It sells for 150K, yielding 50K in profits. Let's move Westward. Let's say that materials and labor are more expensive by 1.5. That puts you at 40K each for T&M. Let's even do the same for Misc, for a cost, not including land, at 120K. The NAR types and enthusiasts would have you believe that the Western land is "worth" several hundred thousand dollars. But I see lots in the Hills of Berkeley and Oakland for a tiny fraction of that, and I'm sure they're even higher than they need to be. I have a feeling that the costs are buried and we pay what others pay, since we're stupid, needy creatures and we're wired to seek comfort in conformity. So, as we make more money, they apply that affordability idea to it and just charge you whatever will equal a 1/3 of your wages or whatever. Are there ever bidding wars for lots? Or just large parcels of land? Because, even without mortgage deductions, that would appear to be where all of the appreciation is! Something doesn't smell right with the whole goddamned system. Used stuff should go down in value. Technological advances should make things more affordable. Why don't homes (outside of Banking fiasco depressions)?

22. Auntiegrav Follow Befriend (5) 7 threads 228 comments Belgium, WI Premium

    50   2:11pm Thu 7 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   CL says I have a feeling that the costs are buried and we pay what others pay, since we're stupid, needy creatures and we're wired to seek comfort in conformity. So, as we make more money, they apply that affordability idea to it and just charge you whatever will equal a 1/3 of your wages or whatever. Are there ever bidding wars for lots? Or just large parcels of land? Because, even without mortgage deductions, that would appear to be where all of the appreciation is! Something doesn't smell right with the whole goddamned system. Yeah, it does stink to high heaven, but it comes down to the same thing that the liars have been saying: location. But this isn't the realtor idea of location (corner lots, next to schools, clean streets, etc): it's whether the place you are buying (the house is irrelevant) is where you need to be to do the things you want to do. Now, inject the reality here that a consumer society only wants to consume. That means that the most important locations are the ones that A: get you the money to consume and B: provide you a place to put the stuff you buy. If you buy expensive art, you need a location that is safe and it doesn't have to be so big (an apartment). If you buy cars and boats, you need a place with some room and garage space and a road that gets your boat to the lake (or a lake). This is what I call "Locating Usefully". The actual problem, though, is that the consumer mentality of our culture DOESN'T CARE IF WE ARE USEFUL TO OUR OWN FUTURE. In other words, we can destroy ourselves in the process of accumulating things and working our asses off, but nothing in our culture will tell us we are headed straight off a cliff. The yeast in the Petri dish don't know when they come to the end of the dish until the death wave of yeast BEHIND them reaches the ones at the happy edge of the expanding empire. You are trying to make sense of the price of a useful thing in a useless, directionless culture. That's why it's so freakin' bizarre.

23. CL Follow Befriend (12) 140 threads 1,355 comments Emeryville, CA

    51   3:17pm Thu 7 Jun 2012   Share   Quote   Permalink   Like   Dislike   Good points, AG. Some use affordability as a metric, while others use $/sq. ft. Why wouldn't they use LAND values as the main metric, if in fact, it's the land that matters? Wouldn't that graph be most illustrative? Or am I missing something else?

24. EBGuy Follow Befriend 4 threads 2,095 comments

    52   3:28pm Thu 7 Jun 2012   Share   Quote   Permalink   Like   Dislike   Are there ever bidding wars for lots? Or just large parcels of land? Because, even without mortgage deductions, that would appear to be where all of the appreciation is! Bear in mind, lands tends to be a non-productive asset when it is just sitting around undeveloped. That said, you can get an idea of why RepoForSale tosses around some crazy figures. SiO2 said:I've not done the math but I wonder how much it would cost to actually live 1972 style vs now: 1 car, fairly bare bones. 1 tv, with rabbit ears smaller house, no a/c relatively few consumer goods Welcome to my world.

25. Mick Russom Follow Befriend (2) 7 threads 530 comments Belmont, CA

    53   4:19am Fri 8 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   CL says There have been big advances in materials, labor saving devices and building technology. Why hasn't the price gone down for new SFH? land owners are scumbag racketeers that prevent development. simple.

26. Michinaga Follow Befriend (2) 3 threads 283 comments

    54   5:54am Fri 8 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Clearly, we need to bioengineer human beings so that they get smaller just like transistors have always done. After a few decades, human bodies would be a few millimeters tall, and an old-style 1500-sf house would be so huge that you couldn't walk across it in a day. Even after houses got much smaller, we'd still have a ton of space. In palaces with ceilings that stretch up to the heavens! Same price per square foot: but we'd only need one square foot.

27. Auntiegrav Follow Befriend (5) 7 threads 228 comments Belgium, WI Premium

    55   6:51am Fri 8 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   CL says Why wouldn't they use LAND values as the main metric, if in fact, it's the land that matters? Wouldn't that graph be most illustrative? Or am I missing something else? Land values only correlate well if you are looking at farmland for farming. Otherwise, the actual value of the land is only as the placeholder for people getting to where they want to be. Most of the real estate transactions are for the placeholder, not the land itself. Just as most of the farming is done to extract value from the land, not to put value into it (the old idea of plantation economics during an expanding empire). The placeholder is only valuable if someone else wants to buy it (or something next to it). Adding growth potential value to the land requires animal manure (organic matter), not chemicals. The land is only valuable as land if someone wants to buy the things the land produces. When food prices drop, then land values plummet, and the speculators buy it up and turn it into placeholders for roads, bedrooms and shopping malls. Eventually, food prices go up again, but less land is accessible to farm it, so the price rise is worse each time in the cycle, as we are seeing farm land prices take the elevator in Iowa based on corn and soybean demand.

28. taxee Follow Befriend 88 threads 457 comments El Cerrito, CA Premium

    56   7:10am Fri 8 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike   Protected   When someone can print trillions in their basement and buy property and hoard it, then prices don't matter to them. They haven't exactly stolen your money, just your purchasing power if you happen to have to work for your pay.

29. ArtimusMaxtor Follow Befriend (3) 803 comments

    57   9:27am Fri 8 Jun 2012   Share   Quote   Permalink   Like   Dislike   A classic and one of my favorite scenes.

30. ArtimusMaxtor Follow Befriend (3) 803 comments

    58   10:26am Fri 8 Jun 2012   Share   Quote   Permalink   Like   Dislike

31. Mick Russom Follow Befriend (2) 7 threads 530 comments Belmont, CA

    59   11:17am Fri 8 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Auntiegrav says nd the speculators buy it up and turn it into placeholders for roads Problem is, there is no basis for the index of value. Tax advantages, inflation, increase in monetary supply and skewed or unfair access to credit drastically effects the price of land and real estate that has NOTHING to do with demand or value. Its a total manipulation. They are using monetary policy to steal the wealth of the US family and the world. You are not allowed to get ahead. In fact, even if you bjuy and hold as they tell you, you still end up behind with the loading and taxes and massive market volatility. Only the rentier class with unearned income has a death grip on their wealth. The rest of the wage slaves are simply driven by fear and whatever we have left over ends up being greed and hoarding. Between these two, there is a stampede for artificially scares and artificially expensive resources. Welcome to the end of an empire.

32. zzyzzx Follow Befriend (9) 414 threads 4,133 comments Baltimore, MD

    60   11:29am Fri 8 Jun 2012   Share   Quote   Permalink   Like   Dislike   Why doesn't gasoline follow Moore's law? Why doesn't food follow Moore's law?

33. CL Follow Befriend (12) 140 threads 1,355 comments Emeryville, CA

    61   2:18pm Fri 8 Jun 2012   Share   Quote   Permalink   Like   Dislike   zzyzzx says Why doesn't gasoline follow Moore's law? Why doesn't food follow Moore's law? If the homeowner isn't insulted by your offer...you didn't bid low enough!!! Gasoline is obviously different, since it's a consumable, sold on the world market, and susceptible to shortages, world conflict, and depletion. Food production has exploded from technology and is typically cheaper, more plentiful and easily transported, etc. Not even counting genetic manipulation, improvements in pest control/pesticides, preservatives, and on and on. Prices for food are affordable, n'est-ce pas? And technology has made them so. Housing...not so much. Although construction efficiencies are gained, prices go up (no matter what).

34. EBGuy Follow Befriend 4 threads 2,095 comments

    62   2:49pm Fri 8 Jun 2012   Share   Quote   Permalink   Like   Dislike   Power efficiency is a benefit of Moore's Law that has an analog in the housing world. Furnances, AC, stoves, and many appliances use MUCH less power than in olden times. In addition the building envelope has become much better at retaining and/or reflecting heat (better insulation, double pane windows with reflective coatings). Just like you use much less power to operate a mobile phone (compared to a computer 10 years ago), a home also requires less energy to maintain a certain standard of comfort.

35. B.A.C.A.H. Follow Befriend (6) 5 threads 2,359 comments

    63   10:21pm Fri 8 Jun 2012   Share   Quote   Permalink   Like   Dislike   Not really. At least till the present, power efficiency has improved by orders of magnitude in i.c.'s, compared to appliances' by tens of percentages.

36. swebb Follow Befriend (3) 29 threads 490 comments Denver, CO

    64   12:07am Sat 9 Jun 2012   Share   Quote   Permalink   Like   Dislike   wthrfrk80 says So does illegal immigration since it increases the demand for housing. And it's all done under the guise of "compassion." Ha! Off the deep end with that one...

37. Auntiegrav Follow Befriend (5) 7 threads 228 comments Belgium, WI Premium

    65   11:42am Sat 9 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   Mick Russom says Problem is, there is no basis for the index of value. Tax advantages, inflation, increase in monetary supply and skewed or unfair access to credit drastically effects the price of land and real estate that has NOTHING to do with demand or value. Its a total manipulation. Yup. That's kinda what I was tryin' to say, also. Thanks.

38. Auntiegrav Follow Befriend (5) 7 threads 228 comments Belgium, WI Premium

    66   11:51am Sat 9 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   swebb says So does illegal immigration since it increases the demand for housing. And it's all done under the guise of "compassion." Ha! Off the deep end with that one... Not far off. Read "Ike's Spies" by Stephen Ambrose or pretty much anything that tells the story of Operation Paperclip. We continued to import or defer Nazi war criminals for aerospace and oil companies well into the 1970's, because they were cheaper (especially when the CIA blackmailed them) than hiring local. Immigration policies in general are governed by corporate interests, and any idea that pops into some exploitative rich guy's head is fair game for lobbyists to bribe politicians. The only thing stranger than what you can imagine is what They actually do.

39. Auntiegrav Follow Befriend (5) 7 threads 228 comments Belgium, WI Premium

    67   11:55am Sat 9 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   CL says Prices for food are affordable, n'est-ce pas? And technology has made them so. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/06/06/BUJG1OT4D8.DTL "The majority of people working in food industry jobs earn low- to poverty-level wages, do not have health benefits and have little to no chance of advancement," Next time you hear of an E. coli or Listeria outbreak, think about what we are paying the people who handle the food. "Efficiency is the straightest road to Hell." - James Howard Kunstler

40. SiO2 Follow Befriend 3 threads 189 comments

    68   3:26pm Tue 19 Jun 2012   Share   Quote   Permalink   Like   Dislike   EBGuy says Are there ever bidding wars for lots? Or just large parcels of land? There are bidding wars on scrapers in the Fortress. Even in the last few years.

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