The Marginal Utility of (House) Utilities: Only 1600 Square Feet! (October 25, 2010)
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K “In the near future, rather than marketing the total square feet, we will market a structure based on the average cost of utilities per square foot per year. A person will pay more for a structure to get less because it has well-insulated but fewer square feet and lower fuel bills than another comparable structure. ‘Natural gas bill: only $14,700 per year! And only 1600 square feet!’”
J “A few individuals have noted that the market for houses won’t stabilize until the average price is more in line with the long run price measured by the S&P/Case-Shiller Home Price Indices or another index of housing prices. We are not there yet.”
K “The average size of a new structure must be more in line with the average size in the past so that a family can afford the facility. The government should not dictate the maximum size for a house; the market should determine the optimal size of the appropriate structure. Single family homes may not even be the model home for the future. Townhouses and more open space are more efficient and desirable to house the town.”
J “The four horsemen of the housing apocalypse ride together – a bigger house means a bigger mortgage, a bigger tax bill, a bigger insurance bill and of course a bigger HVAC (Heating, Ventilation, and Air Conditioning) bill to maintain the monster. A smaller house means a smaller mortgage, a smaller tax bill, etc.”
K “And fewer furnishings are needed to furnish it. The government makes it too cheap to get into the beast. Then the real costs devour the owner.”
J “The Republicans and the Democrats and their corporate owners just won’t let the government get out of the housing business.”
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Bumper sticker of the week:
Natural gas bill: only $14,700 per year! And only 1600 square feet!