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Excluding the value of the land, why do houses in the U.S. appreciate anyway? Nothing else I buy does, but somehow this wooden box that I leave out in the rain
by hudibras 9y ago
Excluding the value of the land, why do houses in the U.S. appreciate anyway? Nothing else I buy does, but somehow this wooden box that I leave out in the rain for 30 years becomes more valuable with time.
(Although I have a sneaking suspicion that years of property taxes and maintenance costs eat up most of the profit...)
- AznHisoka 9y agoSupply and demand. new cars get built everyday but house supply remains the same (for the most part), while population increases.
- hudibras 9y ago1.2 million new housing starts in the U.S. annually, though.
- brianwawok 9y agoSure. Many are in cornfields in a small town. So random area in my zip code: https://www.zillow.com/mishawaka-in-46545/home-values/ https://www.zillow.com/mishawaka-in-46545/home-values/ It is basically flat over the last 10 years. If you go back further, it more or less matches inflation. Now look at someplace people actually want to live, like Chicago https://www.zillow.com/chicago-il-60614/home-values/ https://www.zillow.com/chicago-il-60614/home-values/ The value curve is much different. So basically, it is the land that goes up. Your actual HOUSE value goes down a tiny bit every year. I.e. all else being equal, a brand new house sells for a bit more than a 40 year old house. But if that 40 year old house is on an amazing piece of land, the overall (house + land) value could very easily appreciate a LOT.
- rsynnott 9y agoIt's the value of the land, essentially (or of the land plus zoning plus facilities). The actual structure tends to depreciate in real terms, though in nominal terms replacement cost will rise with inflation.
- sushid 9y agoIt's just the land. In SF we have "houses" that are partly burnt to the ground and unfit for living being sold for > $800k.