> But it's certainly worth asking why an economy that recently was able to provide one standard of living to more of its participants seems to have trouble doin

> But it's certainly worth asking why an economy that recently was able to provide one standard of living to more of its participants seems to have trouble doing so now. You and iamleppert ask the same (good) question but I think that it has a somewhat simple answer: This economy still does provide housing to everyone...just not in the locations where several of those people want to be. My hometown of nowheresville, SomeOilState on the former fringes of BigCity is a classic example. Just a handful of years ago, I bought my first house for under $150,000 there. It came with a 1/4 acre lot, a pool, three bedrooms and about 1,800sqft of (air conditioned!) living space. Not to mention the two-car garage. In the intervening time since I left that property, its value has shot to more than $200,000 (and it doesn't have a pool any more). But it now has the attractive quality of being a <30 minute drive to many new corporate headquarters and inside a suburb with a growing tax base so that suburb can afford large-city-style amenities. A friend of mine living just north of downtown BigCity lives in a townhouse right next to a light rail station. He bought his property six years ago and it has gone up in value 2.5 times; he regularly gets letters from real estate agents asking if he wants to sell to their clients for cash. On the other hand, my 14-acre plot of land out in really-middle-of-nowhere, SomeOilState has gone down in value. There used to be three houses along the same country road as it. Now there is just one because the other two burned and were demolished and not replaced. I'd give away the plot if someone wanted it but no one wants to live there because there are very few jobs. As a society, we've started deciding that we want to live closer to jobs and schools and shopping and amenities...not farther from them. And areas that had fewer jobs now, usually, have more of them because those jobs are moving around from other places. On top of it all, those growing areas are experiencing pushback from residents--new and old alike--who object to new construction and more housing units. Therefore, the prices climb because, as you correctly pointed out, housing is not fungible.