[kccqzy]

Theoretically these capital expenses like fence replacement or roof replacement should have been deducted from the market value of a house when you buy it: a theoretically rational buyer would take into account the present value of future capital projects. And this just goes to show how much the market value of a house is now much higher than the present value of all future rent. In simpler words, the market is frothy. Buyers just hope the market remains frothy when they sell.

[laughing_man]

Oh, all this stuff was fine when I bought the place fifteen years ago. But eventually everything in a house will wear out right down to the foundation. And that was my point -- these are normal expenses you need to account for as a homeowner. Forget the price; I'm just trying to keep the house livable because I live here.

[skew-aberration]

I don't follow this logic. Homebuyers do deduct these costs - I certainly did. House price is still tightly coupled to NPV of rent - expenses. People are a) predicting higher growth in rent over time (there are sound economic reasons to do so, though AI is a curveball) and b) use different discounting rates due to access to credit, etc.