Wages & Real Estate

I made a few calculations after we watched part of Mr. Blandings Builds His Dream House on Friday. I was suspicious while we were watching this because there were a few factors that lead us to believe that Mr. Blandings and his family were getting badly ripped off, but the numbers didn’t seem to add up (literally). So we haven’t yet seen the remainder of the movie, and I haven’t attempted to look ahead because I want to make some predictions for the movie, or else point out some inconsistencies in case I’m wrong.

Here are some numbers to consider, with today’s equivalent in parentheses:

  • the house in Connecticut sold for $11,500 ($116,242)
  • Mr. Blandings’s annual salary is $15,000 ($151,620.12)
  • Mr. Blandings took out a $6,000 mortgage ($60,648.05)
  • The average Manhattan apartment in the 1940s cost $50/month ($505.40, although rent for Manhattan apartments has since grown much more than that)
  • The property in Connecticut is an hour away from NYC and spans 35 acres

As we learn about the house, more and more problems about it are slowly revealed. We find out that the property is smaller than it was explicitly advertised as, we find out that the house is dilapidated and going on 200 years old, we see the property is in disrepair, and we also see Mr. Blandings has trouble finding the house on his own. The audience is led to believe that this is, in fact, a very bad deal, but, after looking at the above numbers, it might not actually be that bad. Mr. Blandings makes a pretty decent salary, even if he is the only one supporting his four-person family (plus also paying the lady we saw handing him water and tea in the morning). Additionally, although the house is not in the most convenient location, it still costs less than Mr. Blandings’s yearly salary, and it is on quite a large piece of property. Mr. Blandings and his wife might not have experience flipping homes, which can be expensive, and they will also have to pay taxes and living expenses, etc. but even with all these considerations, this is still isn’t such a terrible rip off. If the Blandings family were paying about $50/month for their Manhattan apartment, then they would be paying $600/year, which means that they would have their mortgage mostly paid off in just ten years if they continued to spend just as much on the mortgage as they did on the rent back in Manhattan. Of course, they put $5,500 down for the house, (which is a significant number, so they must have had a good amount in savings) so they probably don’t have too much savings to fall back on now that they bought the house. They’ll have some new expenses that they didn’t have before, now that they’re living in a new place, but all information points to the fact that they are nevertheless doing pretty well financially. If the Blandings family is taking out more than a ten year mortgage, (a lot of people today take out thirty year mortgages on new houses) then they’ll likely be paying even less to live in their house than they did for their apartment. Assuming the house won’t actually need to be demolished, then this house is only going to appreciate in value, especially once the Blandings family actually fixes it up and makes it livable.

If, for whatever reason, something happens to the house and it needs to get demolished or it goes up in flames or otherwise needs to be destroyed, 35 acres is still a lot of property! And unless the laws have drastically changed since 1948 or there has been some illegal activity going on behind the scenes, then Mr. Blandings should have some kind of homeowner’s insurance. This deal might not have been the most thought-through one ever, (even if only for the long daily commute Mr. Blandings will presumably still have to make to get to work everyday in NYC) but it’s not hardly the worst one ever.

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