A lot of the price of homes is the land, which means that (barring local regulation) homes will begin to be built up a lot more. It might seem that way, but I'

A lot of the price of homes is the land, which means that (barring local regulation) homes will begin to be built up a lot more. It might seem that way, but I've come to believe it's the other way around. When land is cheap, people build lavish houses (see the midwest). When land is unholy expensive, people are devoting every dime just to get the plot, they can't afford to build a nice house. Similar to how (this is hearsay) new development is more lavish in times when mortgage interest rates are low, and more spartan when rates are high. Buyers who must devote more of their payment to interest, have proportionally less to spend on the property.