Comments on: Sold, Sold and Sold again

By: Larry

Larry — Thu, 21 Aug 2008 00:39:58 +0000

That’s a good question. You wouldn’t do it for energy saving (the example I used was replacing single-pane, which isn’t used these days because they lose too much heat), but depending on the type, they can wear. They just may get to the point where they don’t slide properly, or you can’t get parts to replace a broken latch, or the anodized aluminum finish gets worn and scratched. Particularly the cheap ones probably have a limited life. Same for sliding doors.

By: ARDELL

ARDELL — Thu, 21 Aug 2008 00:34:51 +0000

Larry,

Do you think a home built today would need windows replaced 30 years from now?

By: ARDELL

ARDELL — Thu, 21 Aug 2008 00:33:02 +0000

That’s why I used a 93 built house as an example. Not as much to replace. I did include siding as many mid 90’s homes had the type that ended up in class action suits. LP or similar products. Not saying the subject of this post did, but I wouldn’t expect a 90s kitchen to have to have windows replaced or a kitchen remodel. In fact adding too much might not increase the value if it’s overimproved for the neighborhood when finished.

I can’t guess what might be more “in style” 30 years from now, as in the case of a 78 built home compared to today. I’m pretty sure stainless steel won’t last forever. Maybe 90s white will come back.

By: Larry

Larry — Thu, 21 Aug 2008 00:23:05 +0000

That’s a valid point; it’s not just recurring maintenance like replacing the roof, if the house is older than 30 or 40 years,You may have to plan on replacing single-pane windows and removing popcorn ceiling (which can contain asbestos) and so on. Some things just have to be fixed because they’re outmoded.

A true ownership cost study should also consider feasibility of replacing an older less efficient furnace with a newer, more efficient one, and other such cost-saving measures. Not that the old one doesn’t work, but you have to decide if you’ll get the money back.

By: Carrie

Carrie — Thu, 21 Aug 2008 00:15:24 +0000

We have a 78 split level home, so our cost is higher than this home owner had, but here’s what I consider major works we have done in the past 10 years:
Kitchen remodel, new windows, put up siding one side of the house, new garage doors, landscaping and sprinkler system, new roof and gutters, new hot water heater, new furnace, and we are about to get someone to texture ceiling (we removed our popcorn ceiling), paint inside and outside, and replace carpet. I don’t remember all the numbers, but all the work is (or will be) probably in the $65,000 range, which average to about $550 a month. Now we did start with a house with very overgrown back yard, so the landscaping was quite expensive, in hindsight we probably should have picked a house w/ brown grass instead. Also most of the tasks are not absolutely necessary and expensive (kitchen remodel and landscaping), but they did improve our quality of living. I don’t know much about sewer lines as we have never need to do anything for ours, if we only talk about roof, hot water heater, furnace, painting outside every few years, then $200 a month should be enough to cover them assuming roof needs to be changed in 15 years. But wait I didn’t factor in inflation, owning a house is depressingly expensive…

By: ARDELL

ARDELL — Wed, 20 Aug 2008 23:55:07 +0000

Thanks Larry. I think the list I use and noted in comment 12 are the ones most homeowners should note.

Michael,

I think all homeowners deserve to have a reserve study type of understanding before purchasing a home. Most inspectors provide life expectancy and replacement considerations for everyone who is purchasing a home.

Deferred maintenance is an appeciation thief. All owners should be aware of that and factor maintenance and replacement costs into their homeowner affordability calculations.

I don’t think it will scare people. In fact most find it good to know and less stressful to be prepared for expected expenses.

By: Larry

Larry — Wed, 20 Aug 2008 23:29:35 +0000

Ardell, keep in mind that plumbing and wiring that’s installed these days will likely last a lot longer than older types. We really don’t know how long these plastic pipes will last, because we have no failure history on them, but they won’t corrode, and they won’t scale. We’ll all probably be long gone before plumbing installed today will fail from old age. Ditto for wiring.

By: Michael P Lindekugel

Michael P Lindekugel — Wed, 20 Aug 2008 23:20:49 +0000

“Are there any other major costs involved in home ownership that we should subtract against appreciation factors over time?”

The entire cost of the house. generally, but not always, the structures depreciate in a financial and economic sense. the land increases in value as land is in finite supply.

I think a reserve study would scare most people away from homeownership.

By: ARDELL

ARDELL — Wed, 20 Aug 2008 20:52:20 +0000

Thanks Michael. So going back to Mortgage Samson, I would think that 7/05 to 6/08 is also “normal appreciation” given it is the same per year as the first 10 years. Unless he means 5% was “normal for that 10 year period, but not normal for 05 to 08.

Generally speaking, houses built in 03 should not need a roof yet, but likely had the hot water tank replaced. Heater and siding would be concerns over the next owner lifespan.

When I look at appreciation, I also look at the cost of major upgrades needed. Usually the #1 cost is siding (if needed ever), the #2 is roof, the #3 is heater and the #4 is hot water tank.

Are there any other major costs involved in home ownership that we should subtract against appreciation factors over time? In Seattle I see water sewer lines at $8,000 to $10,000 being done, but often they are over 50 years old.

It would be nice to work out a “reserve study” somewhat like a condo, for the average single family home. I expect that would be helpful to a lot of people.

By: Michael P Lindekugel

Michael P Lindekugel — Wed, 20 Aug 2008 19:42:32 +0000

Appreciated by 66% in the first 10 years for a yearly rate of 5.2%

Appreciated an additional 33% from 2/03 to 7/05 for a yearly rate of 13.2%

Appreciated an additional 15.8% from 7/05 to 6/08 for a yearly rate of 5%

from 3/93 to 6/08 the yearly rate is 6.4%