[rdw]

I used to believe this and then I got into the area. It depends on the area of course but it turns out that the cost of the house is quite significant. House construction costs are $200-500 per square foot, putting even a medium-sized house at around a quarter of a million dollars. When you look at the costs of empty plots of land versus similar plots of land with houses on them, you'll see that the housed plots of land cost the same as the empty plots plus the construction costs of a similar-sized house. In the areas where I looked, the costs of the house dominated, such that the land value is about 20% of the total value of the plot. Even the variance that occurs at that level can be further explained by the value of potential future plots of land on the space -- a plot of land that has one house but could hold a second (for whatever reason) is more valuable than an otherwise-identical plot that can only support one house.