The house I was born in sold for $4000

Maybe it's just a stupid statement made out of tv shows like 'extreme makeover home edition', correct me please if I'm wrong....<p>In US most of the houses seems to be made over a wooden structure, making them more fragile, easy to be renovated / customized / moved / rebuilt and, most important, cheaper.<p>Here in Italy (and AFAIK in the whole Europe) there's nothing like that: full concrete and a proper basement, basically no wood (except from roof).<p>I just bought my first flat and I've spent 168k euros for a 85 square meters flat 25 km from Milan. Despite the crisis, prices are stable and/or are decreasing very slowly.<p>You will never find, even in the worst zones of the cheapest cities an house at 10k euros here, neither a bunch of bricks will be sold for that. :)

I'd really like to see a low-tax, low regulation part of the US (WA, NV, TX, or TN) where someone buys a few thousand acres and lets people build "temporary" structures (with power/fiber/wifi/etc.) for living and solo-working, combined with some more permanent structures for offices, meetings, socialization, etc. Essentially like a 2-5 year Burning Man encampment campus for various startup projects.<p>If someone's "personal burn rate", while living comfortably and efficiently, were $10-15k/yr (while still eating great food, socializing, medical care, etc.), it would make mostly-equity compensation as part of a founding team really viable.<p>The point would be to get the benefits of density without the costs of luxury.

Worth pointing out is that even $40,000 houses appear to have $1,800 a year tax bills. Treating that tax as a perpetuity you would need to invest 1800/.0357 = $50139 at mortgage rates to break even. It's still surprisingly inexpensive, but property taxes tell at least some of the story. A $4000 sedan that obligates you to $2000 in annual license fees is not a particularly good deal, even if it will run for another ten years.

This is why I'm very reluctant to buy a million dollar shack here in Silicon Valley. What if the tech industry goes on the same trajectory as the automobile industry, and San Francisco ends up being the Detroit of the 2020's? Is there something intrinsically "magic" about the Bay Area, or is it just the coincidental clustering of tech companies that makes this place special?

Couple comments. I didn't research the exact numbers in the post. I heard the house was sold for $4k, and the point wasn't about the exact price, but my perception of life after growing up in an area of constant economic decline.<p>Also one of my goals for 2013 was to hit the home page of HN. I didn't think my first attempt would do it. Thanks!

This post struck a chord with me as I'm from the central NY region, not too far from the OP. I get back to my hometown every year or two and the decline is more apparent every trip. Everything from my youth- the places I worked part-time, the schools I went to, the places I used to hang out at, the major local employers, they're all gone or in major decline. Many houses are boarded up, abandoned, and are being slowly reclaimed by nature. Most of my school friends have moved away, and most of those that have stayed around have basically wasted away. In my own lifetime I have seen long-term economic decline happen and it has scarred me in a way that is difficult to articulate.

Homeowners of HN: how do you justify tying up a large percentage of your net worth in a home?

I'm from the same town, and now live in the Bay Area. I still can not get used to the housing prices here...which have been increasing recently: <a href="http://www.mercurynews.com/portlet/article/html/imageDisplay.jsp?contentItemRelationshipId=5138973" rel="nofollow">http://www.mercurynews.com/portlet/article/html/imageDisplay...</a><p>When I visit my hometown, I feel like all the prices are in a different currency.

OP neglects to mention if there were any back taxes or water liens owed. Or if the house had been condemned. All I could find was one lot (not house) under 8K.<p><a href="http://www.zillow.com/homes/for_sale/Jamestown-NY/pmf,pf_pt/5317_rid/0-8000_price/0-29_mp/days_sort/42.180451,-79.108257,42.002366,-79.376736_rect/11_zm/" rel="nofollow">http://www.zillow.com/homes/for_sale/Jamestown-NY/pmf,pf_pt/...</a>

<i>The population of California has a perception of growth, while the Rust Belt has a perception of decline. This must effect the collective psyche to point where taking risk becomes less socially acceptable. Taking entrepreneurial or financial risk when you are gainfully employed is less tolerated when many people around you (and in fact entire industries) are struggling to get by.</i><p>I think there's something more subtle going on here. If the economy as a whole is doing well, risks tend to pay off; if the economy as a whole is not doing well, risks tend to not pay off. You don't even need any social pressure to make people in the rust belt take fewer risks than people in silicon valley; you just need people who use past performance as an indicator of future returns.

My mom was mayor of Jamestown for a couple years. Most houses that were maintained have kept their value. We just have a twisted sense of how housing value should work.<p>Even around Chautauqua lake, where the best real estate is in that county, the max is probably around $3mil for houses that would make an $3mil house around here (DC) look like a cottage.<p>Location, location, location. I can drive there in under seven hours these days. Straight through central PA which makes central Jamestown look like London.

More startup needs to move to low cost areas.

WTF?<p>If an <i>house</i> can be built for $12000, why are flats selling for $100k+ routinely?!?!?<p>If it's just due to land value, then why not build ultra-tall skyscrapers to amortize it?

In his much-quoted column, Friedman says(<a href="http://www.nytimes.com/2013/03/31/opinion/sunday/friedman-need-a-job-invent-it.html?hp&#38;_r=0" rel="nofollow">http://www.nytimes.com/2013/03/31/opinion/sunday/friedman-ne...</a>): "Every middle-class job today is being pulled up, out or down faster than ever."<p>Middle income families who rely on manufacturing has been hit hard, with no prospects of an exit.

This is going to be an increasing issue and it's something that Western nations in particular just haven't had to deal with until now.<p>The West came out of Europe. Europe is small. To put it in perspective, the distance from SF to NYC is ~2900 miles. The distance from London to <i>Baghdad</i> is ~3100 miles. So abundance of land is not a problem the West has traditionally had (not until colonization anyway).<p>Added to this, mortality has been high but population growth has been higher. The last century saw a dramatic rise in life expectancy (primarily due to a drop in infant mortality). The last 50 years has seen a dramatic drop in population growth (the lesson seems to be that the natural reaction to uncertain times by people is to breed more).<p>So the West is being crushed by the weight of supporting an ageing population from a system established at a time retirement was a rarity.<p>Add to this to overall trend of the last century has been one of urbanization.<p>And just to put the nail in the coffin, low-tech manufacturing has largely fled the West for the developing world where labour is cheap.<p>Our entire society seems premised on both population and economic growth. What exactly do we do when the population starts shrinking? This is a bridge we haven't crossed yet.<p>The experience in parts of the US seem to indicate the transition won't be an easy one. Cities with negative population growth have suffered from appalling crime and poverty that seems much harder to flush out in a city full of vacant buildings.<p>The ongoing story of Detroit is nothing short of surreal. That's a city that is slowly being reclaimed by nature, which is really what should happen. Half-empty cities are not healthy cities.<p>Now add to this the whole concept of home ownership. Home ownership is aspirational. It's political goal. Home ownership comes with a huge cost however.<p>- The unlucky who buy in declining cities have a huge part of their wealth eroded leading to virtually impoverished retirement.<p>- It leads to an inflexible labour market (people are unwilling or unable to move to where the jobs are).<p>- It has a snowball effect, particularly in the US, where much of the funding for local infrastructure comes from property taxes.<p>I haven't been to upstate New York. I'm one of those living in NYC where half a million dollars for a studio doesn't seem that outrageous.<p>If there's one lesson from this is that everything is transitory. I believe one of the largest fallacies of the Twentieth Century was that the idea set in that everything was going to keep growing and keep getting better forever. The institutions you grew up with would last a life time.<p>Hell, this even applies to climate where we base our views on a ridiculously narrow band of Earth's or even human history.<p>Cities come. Cities go. Nations come. Nations go. To think that the USA or Europe will exist as they do today a thousand years from now is the height of hubris and/or naivete.

(This is more of a response to several of the comments posted so far.)<p>I'd like to come to the defense of low-cost living but also acknowledge that (expensive) city living has its obvious pluses that people already in SV might be taking for granted.<p>I created a low-cost living situation while living in a big (old/pretty) house in New Hampshire by renting out all of the rooms to friends. My rent is "free" and utilities are split 5 ways ($50 per person in summer, $150 in winter. Heating the house is expensive). If you can stand living with other people, I think this is one of the better ways to bootstrap "new job out of college" money instead of putting a down-payment on a smaller home that might not bring in any cash.<p>The house just so happens to be the house I grew up in, which my father sold in 2005 and foreclosed on in 2010 (ultra-conveniently, the year I graduated from college). It needed <i>lots</i> of work, so instead of trying to (re)sell it for cheap I made a deal to fix it up while living in it for reduced rent. Three friends living there cover the rent.<p>The house may be worth more in the future than current rates, and certainly has its share of things-needing-fixing, and my friends pay below-market rent rates, so it seems like a good deal for everyone involved.<p>If I did not have such a house, I think I'd try to buy one and do the same thing. It's nice to have some communal society around after college. (I've planned other things in my life to try to re-create that, too, because I think its important and under-acknowledged.)<p>~~~<p>It's worth noting that there are downsides to living in a lower-cost-than-SV/Major City area. I don't have <i>any</i> programmer friends in real life outside of the people at my work (a <i>very</i> tiny company, and no one is remotely near my age (24)). That becomes a little problematic. I'm reminded of a quote from John le Carre:<p>&#62; Coming home from very lonely places, all of us go a little mad: whether from great personal success, or just an all-night drive, we are the sole survivors of a world no one else has ever seen.<p>It's hard to talk about programming things and I think that's bad. I'm not around as many career-driven people as I'd like to be either and I think that's bad too. I end up spending a lot of time on the internet to talk about those areas of my interest. (And especially HN: I have a lot of affection for the repeated names in this place, even if we all tend to be a tad too negative. Consistent commentors still make a community and I'm thankful for that. Really.)<p>So it's a good setup. And while my salary isn't amazing it's more than enough for my area, and I love my walkable, lovable hometown in New Hampshire. But there's certainly something to be said for cities and high cost areas. I miss being around as many smart people as there were in college.<p>~~~<p>On a note actually related to the article, when I drove around western NY - went to college at RPI, near Albany and headed west for Craigslist ventures - the places I saw just seemed surreal. Some parts of western NY, if you were just dropped there with no context, you'd think to yourself "A war must have happened here maybe 30 years ago". Strange levels of decay and halted-/de- construction

I zoomed in on google map, was hoping for streetview [ in which I fantasized seeing Jack Reacher walk past for some reason ]<p>From the OP, I assumed this would be literally 100 miles from the nearest drugstore/711.. but its bang in the urban grid of a small town.<p>Shouldn't some of the bailout money be towards loans for people to do up cheap homes like this? It would seem a good investment for the future at low cost to enable more people to pick up these low end deals. Are the banks now so stupid they cant get people into homes and paying interest.. instead of this foreclosure fire-sale nonsense ?<p>Assuming this place can get internet installed, it would make some family a great home which they could gradually renovate, after which they would look after the place and contribute to the town.

I left Western NY decades ago, a small town 60 miles from Buffalo, because there was nothing there for me. It's not a place for software entrepreneurs. But now, as I struggle with costs in downtown Chicago, I wonder if there's some way to make something of the old place.<p>The answer is no, unless you can attract the right people there, and for that there has to be a good job and at least few amenities. Both can be created, but only if lightning strikes. It's a tough situation.

Location is basically an extortion racket enabled by the economic collapse of the U.S. outside of a handful of star cities. With NIMBY policies, people in economically vibrant locations keep supply artificially low. This way, a class of people who've ceased providing value can still enrich themselves on a self-sustaining pattern of clueless talent rushing in for the gold rush.<p>What we see is that most of the country is dying-- that's why the real estate is so cheap in places like Jamestown-- but that's driving the costs in the few not-dying stretches to obscene levels.