Working on a little thought experiment today to try and figure out something I see quite often. Homes that are just awful, either from a maintenance perspective or a construction perspective. I’m pretty sure some of my biases will be on full display as we look a little closer into this phenomenon. My base assumption is that the general public should be able to live in a home that doesn’t have disaster written all over it. If that is true, then it comes down to choice. In trying to understand why some homes are awful, are people making a choice on the surface that appears to be wrong?
The Home That Ages
A couple buys a home in 1950 and never moves. They’ve updated the home over time, but around 2000, they went to a fixed income. At that point, they made a decision that they would repair things that broke, but they wouldn’t be doing any more updates, and certainly wouldn’t be taking out loans to keep the home in top shape. The home goes up for sale some time later, and when new buyers walk through the house, their Number 1 complaint is that it is really dated. Still, the home is in a desirable location so these new home buyers pay less due to the updates needed and then over time make upgrades as their financial condition improves. That’s the future through a positive view. Through a negative view, the new home buyers are already maxed out on their loan when they buy the house. The financial condition never improves and the home falls further and further into disrepair. The family comes to see this house as “normal”.
Is Moving The Answer?
I’ve lived in some pretty awful places. Luckily, I’ve been able to move to better ones. What if the same ties that make a community strong are also the ones that also end up keeping a community down? When you see a neighborhood decline, people are always asking, “Why don’t you just move?” Usually, the answer comes back as the person has lived there all of their lives and they don’t know how they would live somewhere else, or, they don’t want to abandon the neighborhood before it comes back. That can be a long time.
I Don’t Think That Income Is The Issue
As I work with new home buyers and first time home buyers frequently, I have to say, I don’t think income, or the lack thereof, is keeping people in awful houses. As an example, let’s say that homes in a particular neighborhood average $80,000. The homes are small, but well maintained. You would think that our buyers would want to move there. It doesn’t seem to work that way. The buyers are looking at homes north of $100,000 that need a lot of work. Why? People seem to make bad decisions. I don’t know if the world has gotten too complex or there’s something else going on. Now, there are areas in the country where you aren’t going to find a home for $80,000 and I get that. But here, in St. Louis, in 2019, I know that you can.
Is There A Solution?
I think there is at least one solution to people living in awful housing. There should be a discussion about what is reasonable and what isn’t when living in a home. As an example, you can’t live in a home if water is running through the basement walls into a finished area. There’s mold, and it becomes a health issue. If your roof is leaking, you can’t live in that home forever without fixing the leak. If you are looking at houses to buy, and one is at the top of your price range but has issues you can’t afford to fix before you move in, they aren’t going to fix themselves after you purchase the home.
Should There Be More Regulation Of Home Buying?
I don’t think this is the answer. For one, there are lots of regulations when it comes to selling a house. You have municipal inspections, private inspections, etc. We have a building code. The problem is bad decision making. I don’t see how more regulation could fix that. As an example, as a real estate professional, I can show hundreds of home in a month to buyers. Of those homes, in all price ranges, I suspect I’d personally buy maybe two or three percent of them. That’s 97% of the homes that people are buying that I think are either overpriced, or not worth the risk of ownership. We tell our buyers what we think as well, it’s not like we hide our opinion.
What To Do If Your Home Is Awful
If you are living in awful conditions, my advice is to move. True, you may move into a house that is just as bad, but you could also move into the home of your dreams. You never know until you get out there and try. If you are looking to sell a home that is awful, I would advise you to look up a competent real estate agent. So many people in this case seek out investors first, and that’s likely a mistake. Selling your home is about pricing. If you get the price right, someone will buy it. Don’t worry about your house not selling.