[cantaloupe]

Especially considering the house structure itself is usually depreciating in real/material value (whether or not the price is still going up) due to aging. At a certain point, just the land needs to cover those real returns.

[JKCalhoun]

The land is the part that appreciates. Proximity to good schools (and well paying jobs at one time) were the driver.

[pydry]

It's amazing how we've managed to set up an economic system where schoolteachers drive up their own rent and declared it fair.

[dumbfounder]

That's true for anyone that provides a positive impact on the community. You make something better, it increases in value. Could be a store, could be a trash person, could be a police officer, could be street performer, could just be the person that maintains a nice lawn.

[quonn]

It‘s not like the structure rots or crumbles every year. It can last 100 years or more so it doesn‘t really affect the price that much. In any case the same house in a great location is valued far, far higher than in the middle of nowhere which is a good indicator where the price comes from. Not from the structure primarily.

[zxcvbn4038]

Have you priced housing in middle of nowhere lately? I would be more then happy to live an hour off the interstate and have a couple acres of trees for neighbors. No problems with maintaining a well, having a septic system, and a propane tank. Doesn’t bother me that DoorDash doesn’t come there, StarBucks is a trip, and Amazon doesn’t do next day delivery. Houses like that now start around $350k and go straight to the moon. Most of them were purchased in the last 2-3 years and the sellers are trying flip them at 2-6x the price having made no improvements at all. The purchase history is public record and very telling.

At some point the banks should step in and say hey, there is no way this property is worth $300k, $600k, $900k - it will never sell at that price again, none of the local industries pay well enough to have a $7k per month mortgage payment, if the loan defaults we are going to take a bath. However the banks don’t do that, they just say California idiot has money to blow, give him the loan.

And of course the California idiot is going to have problems also when he wants to move in 2-7 years and finds out nobody can afford his house.

[DesiLurker]

but the real appreciation is actually in land prices. at least in highly contested markets.

though I agree with larger point that its not productive growth. In fact I have been saying in past that land prices are the perfectly useless sink for the worthless money created by central bankers out of thin air.