Monday, March 23, 2009
A POLL ON WHAT HOUSE YOU WANT
(penthouse, 10,000 sq ft, 6,000 ft, 3,000ft, 1,500 ft homes)
Suppose you woke up tomorrow in an alternate reality where housing was built according to free market priniciples & had been for a long enough for prices & supply to stabilise. We will assume in some inexplicable way that this did not feed through to the general growth rate so we don't all get to be much wealthier in other ways. However, since long term housing costs are 4 times what they could be you get to choose 4 times more housing. Housing would be mainly modular, unloaded off the back of a few lorries over a day or 2. Like mass production car manufacture, which it would probably resemble there would also by all sorts of hi-tech optional extras of the sort currently available in Bill Gates mansion. For Gates these are expensive because it is a one off deal. If a computer run house with its own plug in lighting, heating, cooking, security, ordering from ASDA, & if desired rubbing your back & wiping your bum (separate attachments) systems were being manufactured in the hundreds of thousands they would be affordable in the hundreds of thousands.
As pointed out yesterday 34% of average disposable, after tax, income goes on housing. So if your present approx 1500 sq ft home was only going to cost you 8.5% what would you do?
Obviously nobody is likely to take exactly any of these options but choose the closest.
- Sock it in a retirement account.
- Upgrade the present house - new roof, new water heater, etc. Also, get rid of the crazy early 80s' drop ceiling in the kitchen. What were they thinking?
- Cabin in the country? I could deal with a two-bedroom model on a lake.
We might well find if we were going mudular that it was easier to add a new kitchen, all mod-cons module to your present house than redo the present one in the same way it is often cheaper to replace your TV than repair it. You wouldn't get planning permission for that in this reality but I suspect the missus would like it.