1-Euro Houses(1eurohouses.com) |
1-Euro Houses(1eurohouses.com) |
If you talk to some owners they seem to not care. Yeah they know that their property is falling apart but they won't sell under $value because they bought it at that price or similar reasonings.
So as an individual, what can I do? I don't want to be renting my whole life, I actually want to buy property but the market just doesn't adjust for some reasons. Remember we're talking about Spain, where the job market is shit, and the economy just can't keep up with the events.
1: supply is more elastic than demand. In other words, more sellers took potential listings off the market than buyers stopped looking.
2: governments printing money inflated investor assets like stocks and real estate.
If these are true, a backlog of listings from could flood the market next year, and the government money printing machine should turn off too. So perhaps the real estate adjustment has just been delayed.
But who knows, predicting what the market is going to in these crazy time is a mug's game.
Barring a sea change in housing policy that enables massive amounts of new houses to be built, I would make a significant wager that in 50 years time about 75% of people will rent their home all their life.
Waiting will only help modestly. In the meantime, while you wait, your purchasing power is being destroyed, which is likely to put you in an at-best net break-even scenario on waiting.
2a) Asset prices - such as housing - have been permanently adjusted higher because the real standard of living, the real value of the currencies in question (USD and Euro in this case) have been debased by the central banks and their wildly aggressive 'printing.'
Skeptical? You can see this vividly in the permanently set higher price of things like gold, oil, platinum, copper, silver. Gold isn't going back to $200 or $400 ever again. A gallon of milk will never be $0.25 again. Housing isn't going back, either. What you're seeing are permanently higher lows and higher highs on housing prices, as the currencies are getting destroyed. The average person can't outrun the destruction, only people with liquid assets can attempt to keep up. That isn't to say there can't be a drop in real-estate prices, rather, it's to say that the drop won't roll prices back to a prior band/range.
Occasionally we get a very dramatic demonstration of this destruction in action, as in ~2003-2007, the commodity bubble, caused by the disastrous US financial policies during the Bush years, which smashed the dollar and sent everything else soaring when priced in dollars (also nicely represented in the extreme skyrocketing in GDPs - when priced in dollars - in every other nation on the planet at exactly the same time; eg Czech's GDP went up 300% in just seven years, 2002-2008, priced in dollars; needless to say, their economy didn't actually expand by 300% in that time, that was the USD imploding).
The US has seen very modest real growth over the last 20 years, and a lot of inflation (housing, healthcare, education, vehicles, maintenance costs, etc.). Most people can't keep up with the asset inflation vs their incomes. The same is true in most of Europe, the EU has seen net zero growth for about ~13-14 years now (and that's ignoring the setback from the virus). People can only tolerate this situation for so long before you get hefty civil unrest or political revolution, we've prominently seen a taste of it in the US and France, and elsewhere.
Do you know why software developers are now earning a median of $110,000 per year in the US? Because they're one of the few segments keeping up with inflation at all (thanks to the super fat margins in the industry and global reach of US tech). $70,000 in 2000 is about equal to $110,000 today (and that's a poor adjustment, because major costs like education & healthcare & housing have soared over that time). Or price it in gold over time (up 500%+ since 2000), and then you'll see, the software developers are actually struggling to keep up, and everyone else is de facto drowning.
Of course there's a catch, but if what you really want is to own your own home and you're flexible about where you live, you're the right person for this kind of initiative.
By the way the land is on a consecrated ancient battlefield/holy site, so you can't put a shovel in it without a full archeological review.
People here say these are remote but that is really mostly just how "spoiled" (in quotes because I'm "spoiled" that way too!) Germans are with commute. You can be 1 hour drive away (including traffic) from many fairly central places in Berlin & have very cheap housing outside the city (partially this is because traffic is actually not that bad in Berlin & partially because it's in the middle of an otherwise fairly empty & large plain[0]).
In comparison nowhere within reasonable 1 hour drive from central London is cheap, nor from SF/LA/NYC or heck even Tel Aviv.
Or maybe the answer is to be a house renter your entire life and just save in other ways?
That sounds like part of a chain of dominos to me. I'd imagine given time this would be less common.
At least the land tax system in the USA encourages downsizing and efficient allocation of this resource.
The problem is that we are pilling into cities where land is minimal and thus the market works in supply and demand.
Hopefully as years pass, where remote work is more and more accessible you can be owning your own 1 euro or whatever home in any area and not worry about limited land.
Perhaps it's a uniquely American view, having no connection to the land you live on, looking at it as just an economic resource to be 'allocated'.
I think an interesting point of comparison is Japan's policies around abandoned houses, and efforts to try to prop up vanishing rural communities, where aside from repair/renovation and administration costs, the owner can also be obligated to actively farm agricultural land associated with the property.
When you read the words "$<small_number> house" the words you should read in your mind are "dilapidated building in a municipality with crazy back-tax scheme that would make the California RMV proud and probably also regulatory capture by relevant trade(s) that inflates the cost of repairing the building"
There's no such thing as a free lunch.
You wanna know how much a house costs look at the average income of the working households in the neighborhood. What they can afford is about what it costs.
https://www.point2homes.com/CA/Cheap-Homes-For-Sale/SK.html?...
Now that tons of people with good tech jobs can work from almost anywhere, I expect some of these remote locations to become quite poopular. I wouldn't mind spending summers in a shed in a remote part of Italy, for example.
Listing $1
Taxes $400
Deposit $5,600
Renovations $60,000
Flights $10,000
They talk about some of these homes requiring at least $17,000 of renovations to be done.
The houses are sometimes auctioned off, starting at $1, but they may be sold for more than $20,000.
The deposit is refundable if you start renovating within a year after buying the house.
There are hundreds of amazing ruins around Australia that the land owners can't justify renovating because the costs to do it justice are too much. Huge shame.
Besides the expected costs for this work (Which will be at least 20k Euros up to 200k or more) you will be responsible for paying for many different permits to do this work which can also add up to 100s of Euros. Then you will find out that you get only one year from purchase to complete all renovations or you forfeit your investment.
After all this if you still aren't convinced you will find that the local governments will take months to issue each permit. The few specialized contractors licensed to perform the work will not show up for weeks at a time randomly whenever they feel like it. After one year you will have paid tens of thousands of Euros to local governments and contractors and your house will be worse than when you started.
Since you didn't meet the deadline the local government will take the house back and sell it for 1 Euro to the next sucker in line. This is a stimulus program for local governments and contractors in small Italian towns, and you are the source of funding if you decide to try to buy one of these houses.
Most of those houses have been torn down. But the city has a program that rebuilds the salvageable houses to better than new then sells them at a bargain. The deal is you must live there as your primary residence for five years. These houses begin at $50,000.
- Envisage a restructuring and re-evaluation project within 365 days of purchase.
- Support notarial fees for registration and volture.
- Once all permits are granted, works must start within a maximum of 2 months.
- To guarantee the faireness of the purchase by the buyer, the municipality asks to enter into a surety policy of 5 thousand euros lasting for three years that is then refunded.
There used to be seaside plots for €1 in northern Sweden, with the caveat that you need to live there permanently for 5 years.
In Italy, at least in my experience, what increases the costs are taxes, and requirements to declare the “habitability” of a place...
> While Topeka gets its program [to pay people to move there] underway, other places in America and across the globe are already trying to entice new residents with cash and other perks. Here’s a look at some other spots that would love to have you think about living there.
https://hn.algolia.com/?q=1-euro+houses says 19 hours ago, but as I write it says 12 hours ago on this page.
Buy one, establish a hacker space, hold regular events, show the awesome projects you do, try to have community-positive impacts. Do some remote gigs for funding.
At worse you get kicked out because people don't get technology, don't want you around, find out you're not going to be a source of income.
At best, people love what you do, help you renovate because plenty of materials and help can be had in some communities, and you go from homeless to remote tech worker.
Is this a crazy scenario?
Maybe some of these repopulation projects don’t consider enough the effect over the local rural communities, which are usually very conservative and suspicious toward “strangers”.
I happened to live some 15 years in various parts of Sicily and that never happened to me, possibly because I have no children.
>People are relocating from Sicily because of this problem...
Any data to support this theory?
Gonna need some form of source on that claim before I’ll believe it.
This sounds like something that happened once, but not regularly.
building tiny homes surrounded by an edible landscape and reselling it could be my next hobby-career. its the stuff of day dreams.
having said that..it would depend on how it would be taxed. europe? i am going to go with steep.
Less extreme example: When people sell their house 30% below market rate then you have to prepare yourself for the possibility that you have to spend that saved 30% on remodeling the home. Cheap properties usually have problems but estimating how much it costs to fix them is difficult if you are not the owner. However, the owner knows that it would take X amount of money to repair the home so he deducts X from the market price to clear the sale.
When you're saving 99% expect to replace up to 99% of the house.
The only real way to save money is by doing the repairs/remodeling yourself but that's basically a second job.
Maybe, but this is a constant, no matter how much you initially paid the house (to be restructured).
Strangely enough, for a few hundred thousands of dollars/Euros, a large number of houses already perfectly rehabiitated are available that you can buy and enter into in a matter of a few days.
Also, in all western world you will need to comply with building regulations, build masonry and plants according to norms, have licensed architects and engineers for the projects, "fight" with contractors, etc., etc.
Italy is not much worse or different than other countries in this regard, maybe - it greatly depends on the specific place - permmits will talke a little longer than in other places, but all the rest will be very similar in any EU country.
How about someone who knows a bit of plastering, welding, painting, plumbing and waterproofing? Still a bad deal for them?
> The young economist looks down and sees a $20 bill on the street and says, "Hey, look a twenty-dollar bill!"
> Without even looking, his older and wiser colleague replies, "Nonsense. If there had been a twenty-dollar lying on the street, someone would have already picked it up by now."
> If it looks to good to be true, it probably is.
Is more appropriate here.
Finding a $20 on the street falls within the realm of reason, and is not likely a scam. Finding a suitcase full of cash however, and picking it up probably has strings attached.
One might get a nice vacation house for cheap.
One of such houses (not those shown in the video) was actually near the places where I grew up. Such place is nowadays decently connected (still sub-optimal, but decent). If somebody was forward-looking enough could have bought property for extremely cheap and would be working from there now.
In my opinion, one of the big factors in evaluating a house is the nearby infrastructure, mainly connectivity and railroads / public transport in general. You'll need those anyway. If they're either not present or subpar then you should value the property less imho.
Edit: decently connected means a fttc (fiber to the cabinet, copper on last mile) connection, max speeds being 1gbps down / 100 mbps up, for 25-35 €/month -- you'll never reach such speeds of course, but even one tenth of that would still be usable for most things.
I don't think anyone would buy these houses as an investment, but if you wanted a quiet house in the countryside and spoke Italian already, maybe it could work for you.
* Some towns have a requirement that you start a small business to qualify.
* In some towns the houses are auctioned with a starting bid of one Euro. The nicest ones will get bid up a fair bit, but a lot of them close for one to five thousand euro. The nicest ones (minimal renovation required) can close for up to twenty-five thousand euros.
* Often a refundable deposit of two to five thousand euros is required, with the catch that you start moving in or renovating within a year and complete moving in and/or renovating within three years.
* The houses are often long abandoned. Renovation costs are going to be what they are -- significant -- so you best be handy, as you can cut your renovation costs by 80-90% if you eliminate labor costs. Regardless, your renovations will need to be approved.
* Tax contracts and real estate closing costs, which will typically be a few (as in, around 2 to 3) thousand euros.
This happens in other places as well (Portugal, Spain).
Guess I don't really have a point to this comment, other than to say this parent comment might sound like an extreme exaggeration but AFAIK it isn't.
edit: looks like jacquesm has made a similar point
My property in the US is taxed by: ( [assessed value of the land] + [assessed value of the building(s)] ) * [tax rate] = [total tax]
https://en.wikipedia.org/wiki/Property_tax_in_the_United_Sta...
Money in the bank changes in value. Investments in companies that go bang or bust. Ignoring a fruit plant that dies...
Change is the only constant in life.
Are you in America? Raising your property values is like a religion here.
Best part is you won't even need to lie about wanting to stay in Sask!
Once you're in the country for 3 years, you can apply for citizenship. I think they take a year to process, but you'll get it if you were here long enough and didn't do anything stupid.
It's probably clear to everyone that the cost in the end is going to be bigger. If you watch Raed667's video, the municipalities involved are quite upfront about it and not really trying to scam anyone.
But basically you can see that as a subside or a promotion. The fact that there is going to be other costs associated doesn't means the market ruled it as a bad deal as bobwernstein claimed
Just make sure it has A/C unless you're in the mountains.
Here I was thinking about shorting specific homes, those for which one of the parent comments implied that their value is substantially lower than the current asking prices. It's a very futuristic idea, though not entirely impossible. If you're long on something then lending that thing out to a short seller is profitable because he has to pay you the lending fees (usually up to a few % per year).
The only fuzzy part in this scheme is when does the short seller finally get paid. It would probably require some kind of a foreclosure on the property (otherwise the property owner would have to lock up a significant amount of some other collateral), putting a cap on the short sale profits.
This is kind of how reverse mortgages work. There the bank (or some other financial company) plays the role of the short seller, while the retiree is the long. The short side payout happens at death.
Not that I'm taking a position either way, I actually suspect (real) prices will probably fall if interest rates ever normalise.
youtube-dl --sub-lang LANG --write-auto-sub --skip-download URI
I'd rather just ignore them if they don't want my business.
People will often circumvent rules when they can (e.g. add a second story without a permit, but avoid putting regular windows to claim it's just a storage attic), but if you want to make more profound changes, you better be prepared to fight the bureaucracy.
One can argue about which system is better, but taxing elderly people out of their homes would never fly politically over here.
No. The main funding for local communities are property tax ("Grundsteuer") and business tax ("Gewerbesteuer"), income tax share only accounts for about a third. The height of both are also set on the local level the community has a very direct way to change the available money.
edit: https://kaalvtn.blogspot.com/2013/01/a-poor-widow-bogey.html
edit: A solution to this problem is to allow seniors to defer payment of the land value tax until the next purchase of the land, at which point the next buyer will receive the deferred tax burden.
https://kaalvtn.blogspot.com/2013/01/a-poor-widow-bogey.html
So, long story short: that's the advertised speed.
https://en.wikipedia.org/wiki/VDSL
But apparently there is indeed a new standard for Gbit DSL up to 100m:
1hr drive from central London is probably still in central London, though ;-)
1hr train from London gets you to areas where a reasonable 3 bed semi is ~£300k I guess.
In Munich, an average <80m2 apartment 40+ minutes away from the city center costs around 640K EUR. And if you're looking at a decent detached house we're talking about a million at the very least.
Unfortunately doesn't add up when salaries in tech are 55-85k EUR, with net income somewhere around half of that.
But yes, outside of purchasing real estate, cost of living is pretty good relative to quality of life.
Do you have any examples? I could never find anything larger than a matchbox in a village for under $200k in Germany.
Anything decent I found in the outskirts of any big city was over 500k.
Here's a quick search for houses under €100k with at least 100m^2 and 3 rooms (2BR) in Brandenburg: https://www.immobilienscout24.de/Suche/de/brandenburg/guenst...
It returns 83 results & while not all of them are within 1 hour drive from Berlin, at least a bunch of them are.
Also if you're in the affluent south or west of the country (which I suspect is where you searched?) you will have far fewer options for cheap housing than in the depopulated former East-Germany around Berlin. You definitely can't repeat this "trick" outside of Munich.
Nobody in their right mind would want their kids growing up there.
In family friendly places with jobs the properties are far from cheap.
Why is the east side cheaper? I mean, I know it was occupied by the Soviet Union back in the day, but why is it still cheaper there now?
The reason is that for most homeowners their home equity is the majority of their savings, and homeowners vote in higher proportion than renters (on average). Any politician that allows home values to fall too much will be facing the end of their career.
Under these conditions the only way housing will fall in a lasting way is if something so terrible happens to the economy that... well... you'll have bigger problems than housing.
Housing is fundamentally broken and very hard to fix due to vested interests all over the place. "Housing cannot simultaneously be affordable and a good investment," and we've clearly decided that housing is a financial instrument first and a place to live second.
There is one way out of the housing price trap: telework plus ubiquitous broadband via things like 5G and Starlink. That could allow people to escape the housing trap by locating away from price hotspots. If you simply must live in a big city this won't work for you, but keep in mind that you could always live somewhere more rural and visit big cities any time you please.
I don’t buy that. People don’t like to live in cities primarily because of jobs, but because living in cities is fun. People like to be close to other people, exchange with others and their community.
Living in a small town sounds depressing to me, no matter how fast the internet connection might be.
Maybe if you create your own commune, bring in a social circle from the city. But that has a tendency to fall apart.
This is mostly only true of younger childless people. Once you have kids you can forget about having any fun for the next 15 years or so. And after that, well, how many 45 year olds do you see in nightclubs?
I think you mean "new homes". I don't think there's anywhere in the US with a housing crisis is due to new houses not being allowed. It's usually due to the difficulty in tearing down houses (and low-density apartments) and building higher density apartments. This may seem pedantic, but in these discussions the distinction is important. In almost every housing-related thread on HN, I see people using them interchangeably, in ways that are confusing.
Remember when the 2008 crisis hit, no one was buying but no one was renting either. And a lot of banks with real estate on their books just let it sit there (where it sits today).
Once a the credit default domino chain starts to fall, people and organization will need to get liquid. The first stage will see some people jump in on pent-up demand but after that, real estate will fall through the floor. It will literally drop to near nothing in places.
As someone who was in eighth grade at the time, can you clarify what you mean by this? Every person either 1) buys property, 2) rents property, 3) goes homeless, or 4) dies. There aren't really any other choices.
P.S. I just saw this article:
Mortgage Delinquencies Have Risen Fastest In US History
https://thewashingtonstandard.com/housing-crash-2-0-mortgage...
But, at least in my local market, it would surprise if the banks are sitting on empty units from 2008, as far as I know it all got auctioned off years ago.
This article predicts the covid crisis will center around a new collateralized debt instrument "[after post 2008 banking reform] [d]emand shifted to a similar—and similarly risky—instrument, one that even has a similar name: the CLO, or collateralized loan obligation. A CLO walks and talks like a CDO, but in place of loans made to home buyers are loans made to businesses—specifically, troubled businesses." https://www.theatlantic.com/magazine/archive/2020/07/coronav... discussed at https://news.ycombinator.com/item?id=23480680
Also not sure what counts as looking bad to you, a lot of these villages or small cities are actually quite nice looking (we often go to such places for a day trip) & if I was single/childless and wanted to live a quiet life without much disturbance I'd definitely check them out. They are mostly just not in easy commuting distance to jobs.
In fact some of the places in Berlin with the highest rents (like Kreuzberg) are often a lot uglier than sleepy Brandenburg villages & small towns.
For a while.
For a lifetime? I think not.
ps. I've done 9 months/6 months/3 months in my van with my wife. We love it, but it's not a home, it's a journey.
Germany has a very low fertility rate & even immigration isn't enough to make the population grow more than very slowly so if a lot of people moved westwards and into the cities it means a lot of people moved out of the east and the country side.
Also almost the entire country is fairly flat & with a mild climate.
And Germany actually has among the highest amount of immigration in the world so not sure why you think they don't let people in. In my experience it is actually easier to move here than to the US (I'm an immigrant).
The places where it's a problem are those that people leave, like Bulgaria and Romania. There are basically enough "cheap" immigrants available from poorer European countries that the wealthy ones don't need to also additionally increase the rate of immigration from outside Europe.
All depends where you're coming from. w.r.t weather, I found winters in Toronto less depressing than Paris because Toronto at least had clear skies.
If it were legal to build much taller, though, I do think people would be happy to do that next to the subway stations. Yes, the cost goes up, but people are very interested in living right next to the station.
The last couple of years barely had any snow though.
You cant make immigration easy only in these countries as once you are in the EU you can then move to any other EU state (there is some wait required, like a year I think). So people will basically use these as a jump off point to the countries they actually want to go to (which do not lack immigrants).
I believe the solution is to invest in the poorer countries to make them attractive enough so that their diaspora wishes to return and young people don't want to leave en masse to begin with.
But yes, investment in poorer countries also seems reasonable.
