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Value of new house vs old house, all else being equal?


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2011 Nov 1, 3:41am   19,928 views  60 comments

by Patrick   ➕follow (55)   💰tip   ignore  

From a new reader:

Dear Sir;

I have read and learn alots from your professional and educate website Patrick.net. Sincere
thanks

I have register but don't known how to post a question on your website, please give advice.

The website seem missing something .......as I can not found any answer related to "New
house/condo vs. Old house/condo"

On the website, I can found the estimate/value calculator/ rental comps .... but lack of
New vs. Old. As " the house/condo in same city (location), in southern Californal next to
each other but one is build in 2008 and the another is old (build in 1977-1989) then the
price value must be different and the rental must also be different too. "

Is there any calculator or advice on how different (how many percent in price) from the
renting and/or the value of the New house/condo vs Old house/condo in same location,
Southern Cali?

Please give advice and help.

Sincere Thanks for your Kindness

k.

That's a good question. If a house needs repairs, that takes away from the value. But on the other hand, older houses which have survived till now are often higher quality than the things they build these days with cardboard and masking tape.

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41   FortWayne   2011 Nov 2, 1:30pm  

cab says

FortWayne says

Houses aren't priced at real value, now it's all just fantasy selling price points for suckers... 299, 329, 349, 399, etc

How would they be priced in a fair market? I've only been looking at real estate for a year now and these kinds of prices are all I'm familiar with.

commercial is based on potential income of the commercial property, there is a hard formula for it including your SIC. Residential is usually either based on rent, or replacement cost if in rural areas. All current selling price points are not doing that, reminds me of grocery store price tests.

42   FortWayne   2011 Nov 2, 1:31pm  


FortWayne says

Houses aren't priced at real value, now it's all just fantasy selling price points for suckers... 299, 329, 349, 399, etc

Scanning through more than a million asking prices in my database, we find that realtors absolutely love to put a 9 in the thousands spot:

+-----------+----------+
| thousands | count(*) |
+-----------+----------+
|         0 |   281287 |
|         1 |    18693 |
|         2 |    43538 |
|         3 |    29091 |
|         4 |   154511 |
|         5 |   347462 |
|         6 |    26465 |
|         7 |    50596 |
|         8 |    76094 |
|         9 |   723358 |
+-----------+----------+

It just feels so scammy.

In case you're interested, here's the sql I used to generate that:

select floor((price % 10000) / 1000) as thousands, count(*) from forsale group by thousands;

yeah, scammy and low and downright obvious.

realtors were never the smart types, just lousy salesmen with huge egos

43   thenuttyneutron   2011 Nov 2, 2:39pm  

justme says

ng to avoid in some 1970 era houses, aluminum wiring. Its thicker, less flexible and breaks easily. I hated working with it.

I have a house that is 1 year old. I think this one will stand the test of time. I do seriously think it will be likely that this house will still be standing in 500 years as long as the roof is maintained.

It is a 2100 sqft Full ICF Ranch style house with a full basement. It is ICF from the basement footer up to the sill plate where the roof trusses connect to the house. The footers are built on the top of bedrock that is 7 feet below grade. It is also built on a site that is higher than the surrounding areas.

The wood in the house for framing and subflooring is boric acid treated and I highly doubt I will have any worries with mold or rot. The house scored a 49 on the HERS test. I use about $30 in gas to heat the water and $100 a month if the cold gets bad. I keep the inside at 75 F all the time when the outside could be in the low to mid-teens below zero thanks to the argon filled low E windows and R60 cellulose insulation in the attic.

AS for counter tops, I used Quartz in the kitchen because it is NFS approved and caught a "remnant" deal of granite for the master bath and quartz for the main bath. I also went with tile and carpet.

GOP says

Many of those McMansions are build with Styrofoam facades, that are stuccoed over to appear to be elaborate mason work.

tts says

ove it if stick construction would just die out. I don't even much like SIPs. I think ICF's or block is the

This home is clad with a skin of plastic siding and fake rock to protect the Styrofoam insulation. This is just a covering over for what lies just beneath it, which is 6 inches of wet cured concrete at 8000 psi strength with number 4 & 5 rebar running everywhere in it. This house is solid and you can tell just by the silence even with the road way just 60 feet from my back door with cars zooming past at 50 mph. The walls when adding all the parts are more than a foot thick and have huge window casements for putting plants on.

If this house gets hit by a nasty storm with a EF5 tornado, I would have to replace the skin that wasblown off of the concrete/Styrofoam core and maybe a few shingles. The trusses are hurricane strapped to the house and the roof is not budging.

They are not easy to find these well-built/engineered houses but if I made this one, more like it must exist. You just have to find one that is for sale.

44   Buster   2011 Nov 2, 3:54pm  

I have designed and built new homes several times and I just purchased a 1923 cottage that was totally gutted 4 years ago and rebuilt with a1a materials. For me it is all about design, architecture, floor plan, location and setting, quality materials and attention to details. Most homes around simply do not have any or most of the above items. So this time around I have all the charm and quirkiness of a old cottage in a redwood forest, (built out of red wood too I may add), with all the modern conveniences and efficient mechanics offered up today such as new wood windows (vinyl outside), thick insulation, awesome kitchen with Viking appliances, new heat system, plumbing, electrical, etc. Guess I am most fortunate as I held out for such a place but must say it was worth the wait. In the end I would sum it up by saying go after what makes your heart flutter and go for quality or potential for it if you don't mind fixing up a place. Best wishes and good luck.

45   justme   2011 Nov 3, 12:15am  

Nuttynutron, can you fix the attribution to me in your post which is about two steps above this one? Somone else said what you attributed to me.

The first quote (aluminum wiring) was from "New renter" and the second one (styrofoam facades) was from "The GOP".

46   tts   2011 Nov 3, 1:40am  

thenuttyneutron says

This home is clad with a skin of plastic siding and fake rock to protect the Styrofoam insulation. This is just a covering over for what lies just beneath it, which is 6 inches of wet cured concrete at 8000 psi strength with number 4 & 5 rebar running everywhere in it.

Your house is probably ICF from what you're describing. ICF = Insulated Concrete Form. ICF's have been around for a long time, since at least the late 70's and early 80's, but only started to get any serious use in residential property in the last 5-10 years. So there still aren't very many of them out there. Cost wise they're somewhat more than stick construction but as you note are much stronger and can easily last 80-100 yr. You can build them very very quickly too. There are now ICF systems that let you pour the walls and slab foundation all in one go.

http://www.fab-form.com/fastfootMp/fastfootMpTestimonialNewsRelease.php

500 yr is probably a big stretch though. There are rammed earth homes with 4 ft thick walls often don't last that long in desert conditions AFAIK. Long term water is the real enemy for any home. Even if the roof holds up the water will eventually overwhelm foundation drainage systems and then you're in real trouble when that footing or foundation starts to shift.

Homes need constant maintenance to last, ICF/concrete/block homes just need less while also being insect resistant and largely water resistant. If you're not fixing the roof or windows you'll be spending your time grading the lawn away from the house or repairing the drain tile or putting in a french drain or repairing the filter fabric on the drain at some point in the future.

Hopefully they sleeved the plumbing in your home before they poured the cement. Bad plumbing is what tends to cause the most problems with concrete homes and monolithic pour foundations. You usually don't know there is a leak at all until its too late and the leak has caused a portion of the walls/foundation to shift and crack. If its sleeved its easier to pull and reinstall, especially if you're using PEX. Just make sure they use the permanent strap fittings instead of the push fittings if you use PEX. The push fittings tend to pop apart randomly months or years later in the walls, really makes a mess. Copper is still good too but costs lots more.

47   zzyzzx   2011 Nov 3, 1:52am  

tts says

Hopefully they sleeved the plumbing in your home before they poured the cement. Bad plumbing is what tends to cause the most problems with concrete homes.

I'm thinking that the plumbing is all run in the interior walls, which presumably aren't concrete.

48   edvard2   2011 Nov 3, 2:06am  

Beyond build quality, one of my biggest issues with new houses is that about 99% of them are just unbelievably hideous. My cousin bought a new Mcmansion about 5 years ago in NC. There are probably another 50-60 houses just like hers in the same development: Huge houses with either brick, plastic siding, or a different color brick on the outside. The whole front of the house is a waste of space: The "Foyer" is 2 stories tall- wasting tons of space.

But in addition, the house and perhaps all the others of its kind look and feel like something that will never-ever feel charming or comfortable. They're just ugly, cold, and tasteless. They make all those 70's rancher houses feel downright charming and cozy in comparison.

Ironically when you see what rich people buy these days- they all flock to older neighborhoods with older houses. Why? Because these in comparison just feel a whole hell of a lot nicer and more charming. Unfortunately that means that for most middle class folks your choices are either cookie-cutter mcmansions or crappy falling apart old houses. The remainder of the older, nicer houses are all being bought up by rich folks.

49   edvard2   2011 Nov 3, 2:12am  

New renter says

One thing to avoid in some 1970 era houses, aluminum wiring. Its thicker, less flexible and breaks easily. I hated working with it.

Another thing about aluminum wiring is that its a fire hazard. It has a tendency to work loose from connections and when it does, this creates a lot of resistance, which in turn generates heat, which makes the potential for a fire hazard.

50   thenuttyneutron   2011 Nov 3, 2:28am  

tts says

Even if the roof holds up the water will eventually overwhelm foundation drainage systems and then you're in real trouble when that footing or foundation starts to shift.

Yes it is an Ecoblock ICF house. In my first post I said it was a ranch style ICF with a full basement.

I am not too worried about the foundation shifting. The footers are built on solid Dolomite Limestone Bedrock. This is the stuff that acid has trouble attacking. I was lucky that I had enough surface soil to dig down in to beable to have a basement. Many of my neighbors put in a crawl space because the bedrock was so shallow. I am not worried about the drainage either. The house sits at the high end of the neighborhood and there is a huge lake about 200 yards away and 50 feet in elevation below me. The footer drain keeps all the water away and rarely does it ever make it inside to the crock. The only time I saw water going in is when it rained 6 inches over 4 hours last August.

Yes the house does use PEX and there is only one spot where the water enters the house through the concrete. It is a 1/2" copper pipe that goes to the PEX manifold after passing through 2 ball valves and a pressure regulator. The sewage runs out on the other side of the house through the concrete wall as well. The other utilities are run through PVC conduit that was run through the forms before the pour (Electrical, gas, AC freon lines and intake/outlet for the ERV). I simply plugged them with expanding foam once the utilities were run and don't worry about it.

I put a lot of though an details into this house. The AC unit is about 10 feet from the condenser and has only 1 run of tubing that is soldered at only the 2 end points. The PEX system runs through the basement along one of the main steel beams and up through the floors. I will see any leaks that appear in the PEX system.

My only regret on wiring was that I did not run more CAT5 cables. I have added many more drops but I can only put them in the inside walls. The outside wall is too hard to add new drops.

51   TPB   2011 Nov 3, 2:43am  

corntrollio says

Bet many old houses don't necessarily have these protections.

They didn't need them. They used to "OVER BUILD" to our standards.

Houses are framed with soft woods or even metal studs.
Screws rip out of the metal studs, and nails rip out of the soft white pine. That is the reason for the need for straps.
The older houses were built with a dense hard termite proof pine called Dade County Pine. Nails do not pull out very easy from this wood.

Also the house framing is done in DCP, then on top of that, sheets of green masonary board was nailed to the studs,
there is a 60 gauge metal scrim that is nailed to that, an inch layer of mud is skimmed across that, then over that Then a half inch or more of Plaster is spread over that.

The result is a rigid solid house that can withstand far more than the garage doors flying away or roofs blowing off. There is no sway and give from the wind weakening the structure in the first place.

Also over my windows are Steel Strap awnings not aluminum or wood. The previous owner showed me a dent in one of the awning where where a chunk of debris hit it in Wilma. Had that been aluminum or wood, it would have taken out the window. And probably much of the frame.

tts says

Other than being really wet and cut young there isn't too much difference between dimensional 2x4's and 2x6's lumber today vs 70 or 80 years ago.

White pine was for burning 70-80 years ago. Nobody in their right mind built with it.

52   zzyzzx   2011 Nov 3, 2:45am  

Vicente says

MY problem with many 1950's houses is the design is "traditional" not open floor plan. Here's your tiny formal dining room, your formal living room, your den, the kitchen buried way at back so decent people don't see it.

My problem with newer houses is the vaulted ceilings and the fact that they all have way too many windows, making the house way more expensive than it would be to heat and cool. That and I like privacy.

53   zzyzzx   2011 Nov 3, 2:46am  

thenuttyneutron says

My only regret on wiring was that I did not run more CAT5 cables.

Don't most people use wireless routers anyway?

54   TPB   2011 Nov 3, 2:49am  

My air con stays on 76 and there is constant battle of the wife putting it on 78. She keeps saying she's cold. Even in July weather.

Between white barrel tile roof, terrazzo floors, 10 inches of exterior walls and all of the windows being shaded by clam shell Awnings, there's not much heat getting in, or much cool air escaping.

The down side is, when it's 60 degrees out side(not often enough in SoFl), it feels like it 50 inside.

55   thenuttyneutron   2011 Nov 3, 6:23am  

zzyzzx says

most people use wireless routers anyway?

I like gigabit networks that go everywhere through to a Patch panel in the Central media panel with it terminated at a switch (very important). I just configure the network topography to what I need. There was a time that I lost my network map and had to figure out where 24 different drops were coming from and that was a nightmare. I got smart and taped the drop location for each wire in the patch panel.

On 3 of the drops at each end of the house and one in the middle, I use three radios appliances (not routers) to make a wireless network with the same SSID and RSNA-CCMP key all on three different channels at least 4 channels apart. For any serious networking, you go with the gigabit and use the wireless for convenience. I also isolated the wireless network by making the wired network all on one router and the wireless on an outer network with its own router.

56   tts   2011 Nov 3, 1:40pm  

zzyzzx says

I'm thinking that the plumbing is all run in the interior walls, which presumably aren't concrete.

Possible but usually they don't do that except for stubs that come up through the foundation. It sounds like he really had his details covered though and had the plumbing sleeved.

thenuttyneutron says

In my first post I said it was a ranch style ICF with a full basement.

Missed that sorry.

thenuttyneutron says

The footers are built on solid Dolomite Limestone Bedrock.

You're very lucky then!! Most people don't have a location with that sort of rock formation and natural property drainage. Looks like you really watched out for details and such too so your house will have even less maintenance requirements over time and be far easier to repair then normal to boot!

thenuttyneutron says

My only regret on wiring was that I did not run more CAT5 cables.

Cat5 or 6 is the way to go if you've got the drops, if you don't the power line ethernet adapters are starting to get pretty good. Still not cheap or as fast but 100Mpbs is usually reliably attainable over OK in house wiring with the moderate priced ones.

The GOP says

White pine was for burning 70-80 years ago. Nobody in their right mind built with it.

Not so sure about that.

http://www.fpl.fs.fed.us/documnts/usda/amwood/ewhpine.pdf

"Building construction was formerly the outstanding use of eastern white pine. Handsome houses build of eastern white pine in New England some 200 years ago are still in excellent condition."

I don't doubt there are better woods out there but clearly you're engaging in a bit of hyperbole there.

zzyzzx says

Don't most people use wireless routers anyway?

Yea and for what most people do wireless is OK but if you want to move around lots of data quickly its no replacement for Cat5 or 6.

57   fil   2011 Nov 4, 3:14am  

I lived in a San Francisco Victorian built in the 1880's. The floor joists were 2x12s and either 12 or 16 inches apart. Can't recall. does anyone know what is most commonly used in newer construction? Growing up, i lived in a house built in the 80's and I don't think it had 2x12s. The late 1800s and early 1900's homes I have lived in seem to be built like tanks.

58   corntrollio   2011 Nov 4, 4:42am  

fil says

I lived in a San Francisco Victorian built in the 1880's. The floor joists were 2x12s and either 12 or 16 inches apart. Can't recall. does anyone know what is most commonly used in newer construction? Growing up, i lived in a house built in the 80's and I don't think it had 2x12s.

Should be either 2x12s or 2x10s for floor joists. That's what you would generally use for weight-bearing. It's common to have 2x4 rafters in the attic because you're only supporting the roof. In SF, if you put rooms up in the attic, you often replace the old 2x4s there with 2x10s or 2x12 for floor joists. It's entirely possible you saw 2x10s.

59   zzyzzx   2011 Nov 8, 2:34am  

Tough to say since it's never really equal anyway. I'd go with older houses just to get the (usually) bigger lot.

60   New Renter   2011 Nov 8, 10:02am  

thenuttyneutron says

The wood in the house for framing and subflooring is boric acid treated and I highly doubt I will have any worries with mold or rot.

That was VERY smart! I did the same thing as my fathers house was under reconstruction. The product I used was Boracare, which is essentially antifreeze mixed with boron compounds (boric acid, borax, etc.) I did as much research on the manufacturers claims as I could. It looked good. There is a paper out there put out by the US forest service showing its effectiveness against termites.

The things I liked about this product was its ease of application, low toxicity (once applied) and how the components work against different problems. The borax kills boring insects while the antifreeze prevents fungal infections such as dry rot. As long as the wood doesn't get repeatedly soaked enough to leech out the compounds it should give lifetime protection for much less than even a single tenting. It also imparts some fire resistance to the wood.

I also saw there is at least one manufacturer that sells wood pretreated with this compound. The cost worked out to about $1 more per sqft.

There are a few homemade recipes out there. I tried doing it myself but ended up making a big mess.

And no, I am not affiliated with Boracare in any way, I am just a satisfied customer.

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