Sunday, March 01, 2009

The Cost to Build in 1965

I went to visit my father in Cleveland a few weeks ago and he wanted me to go through a stack of old papers. Most of the papers got shredded but I saved an old folder pertaining to a house that my parents built in 1965. I remember the house vaguely. I remember visiting the site once while it was under construction and I remember a little bit of the time we lived there even though it was for about two years. My grandfather gave my parents the lot since it was next door to them. My brother and I used to run over to their house on Saturday mornings so that we could watch the cartoons on TV in color since they had a color TV while we still had black and white. Everything my parents paid is documented in this folder. It is quite interesting to someone like myself. The house was a brick veneer modern ranch style 40' X 24' single story house with a basement and integral garage. The model was called "The Christopher".

My parents took out a mortgage for $12,500 AT 5 1/2% interest. Their mortgage payment was $80.00 a month. My father made $613.00 a month as an industrial engineer. The basic shell cost $7618.00 and labor cost to build was $775.00.

The entire cost to plumb and sewer was $335.00. Wiring was $140.00. Heating was $108.00. Plastering cost $520.00. The garage door cost $90.00.

The total cost on the construction loan sheet was $13,258.75. I believe the place was completed within 6 months.

I think we have spent way more than this. My labor cost is nothing and we still aren't done yet! My dad told me he once ran for the school board so it would seem we have more in common than one would have thought!


Christopher Busta-Peck said...

Wow. My grandfather built some houses in the 50s and 60s and always talked about how affordable he made them - but to see it in numbers!

It clearly illustrates a different set of priorities. Today, it seems, we'd rather have the debt than a house that built for less than $100,000. Of course, I don't know if I've ever seen a new house of any size or quality built at that price point.

J at IHB and HFF said...

Hello. The nominal price difference betwwen then and now is inflation destroying the dollar but equally important are the relative prices.

Your father bought a house that was priced 2x his annual income and the mortgage cost 13% of his monthly salary (about 3 work days). Compare that to the recent housing bubble and the people going into foreclosure now.

Compare house sizes in 3 centuries and click the link to see Thoreau's building costs: