- Building codes have changed. Things are much safer now than in the past. The chance of dying in a fire has decreased 1/4 since 1950 [1].
- Houses are much bigger. Houses have almost tripled in size [2].
- Quality of finishes have increased. People will probably debate me on this because things have generally gotten cheaper over time but that means that the expectation for a house now is quartz countertops and not vinyl.
- Desirability has changed. For example, the number of sports teams have tripled since 1950.
The short answer is that a house is no longer a place to live, but an abstract financial asset. The problem with divorcing occupation and use from finance and ownership concerns remediation of grievances. The benefit of such a system concerns maximizing the building's utility. I'm personally in favor of a more boring housing market, in addition to automatic tenant enrollment in equity-sharing programs (ie, due to living in a building and paying rent, the person who experiences hardship and loses tenancy still has some small, depreciating ownership based upon what they paid as rent). This helps solve the problem of financial engagement for the less financially literate, in addition to enabling higher-density housing to be built.
Would be useful to see the cost of just the land as well if thats possible. As others have pointed out, the size and feature expectation inflation has to be factored in here. The little "wartime 4" I grew up in north of Toronto was smaller than a lot of "garage-ma-halls" these days and didn't really have insulation. It was a regular feature in winters to get ice on the living room window. My "modest" (by today's standards) house would be a rich persons place in the 70s.
The US M2 in 1950 was <$300 billion and in 2024 was >$20,500 billion (70x increase). The article is using an inflation estimate of ~13x. The author doesn't give an average but the top 3 states by population (California, Texas, Florida) saw increases of 65x, 39x and 44x respectively.
I think it is more likely that house prices have slightly decreased in real terms and they are tracking closer to the M2 as houses are assets not consumables. This gels with home ownership [0] which is generally stable or higher than usual, it doesn't look like people are actually struggling to acquire homes all that much. Especially since I expect household size is shrinking.
Most of the pain people are feeling is because of the insanity leading up to and flowing from the '07 crisis if the home ownership rates are good evidence.
If 101 people want to move to a city that has 100 houses, and they are prevented from building more, then house prices will be bid up as high as they can afford to pay.
The only solution is to legalize building more homes, especially at higher densities that allow more people to live in desirable locations.
hervature ·8 days ago
- Building codes have changed. Things are much safer now than in the past. The chance of dying in a fire has decreased 1/4 since 1950 [1].
- Houses are much bigger. Houses have almost tripled in size [2].
- Quality of finishes have increased. People will probably debate me on this because things have generally gotten cheaper over time but that means that the expectation for a house now is quartz countertops and not vinyl.
- Desirability has changed. For example, the number of sports teams have tripled since 1950.
[1] - https://www.statista.com/statistics/526310/timeline-deaths-n...
[2] - https://www.ahs.com/home-matters/real-estate/the-2022-americ...
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WealthVsSurvive ·8 days ago
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mdtancsa ·8 days ago
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roenxi ·7 days ago
I think it is more likely that house prices have slightly decreased in real terms and they are tracking closer to the M2 as houses are assets not consumables. This gels with home ownership [0] which is generally stable or higher than usual, it doesn't look like people are actually struggling to acquire homes all that much. Especially since I expect household size is shrinking.
Most of the pain people are feeling is because of the insanity leading up to and flowing from the '07 crisis if the home ownership rates are good evidence.
[0] https://en.wikipedia.org/wiki/Homeownership_in_the_United_St...
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seryoiupfurds ·8 days ago
The only solution is to legalize building more homes, especially at higher densities that allow more people to live in desirable locations.
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