3 ms·

> It actually does, the link I provided shows the average square footage went up 50% from 1600 sqft to 2400. This accounts perfectly for the difference you cite

> It actually does, the link I provided shows the average square footage went up 50% from 1600 sqft to 2400. This accounts perfectly for the difference you cited (4.2x is 50% larger than 2.8x). The article at https://www.supermoney.com/inflation-adjusted-home-prices/ https://www.supermoney.com/inflation-adjusted-home-prices/ talks about the sizes of "new homes" that have increased in this way since 1979. But the median price increases seem to take into account all home sales. If most homes sold are not "new", then the comparison is invalid. For example, if 80% of homes sold in this period were not new, then "total square feet sold" only increased by 20% of 50%, i.e., 5%. Indeed it is an easily observable fact that the prices of old houses and apartments go along with general price rises in an area. Without the old house's size changing. > Not sure if you heard there was a mortgage crisis with tons of defaults ravaging neighborhoods. I did hear. And this showed that at least 20% of a home's sale price is not determined by its value as measured in units of surface area. Rather, it's a vulture economics seller's market in which prices are determined by what people are able to pay for a necessary good, not by what is a fair price for that good.

arcticbull 7y ago
> But the median price increases seem to take into account all home sales. If most homes sold are not "new", then the comparison is invalid. For example, if 80% of homes sold in this period were not new, then "total square feet sold" only increased by 20% of 50%, i.e., 5%. Yep, good point. > And this showed that at least 20% of a home's sale price is not determined by its value as measured in units of surface area. Rather, it's a vulture economics seller's market in which prices are determined by what people are able to pay for a necessary good, not by what is a fair price for that good. IMO what it showed was that house prices are dependent on people's ability to obtain financing, and when the financing market ground to a halt, people weren't able to obtain the leverage necessary to sustain the price point. That doesn't mean anything about the intrinsic value of the home, IMO. 2008 is not a good example because there was fundamental, structural problems in the market facilitating such transactions. I think the dot-com pop was a much better comparison because there were no structural issues fundamental to the market but rather a drop in desirability.

arcticbull 7y ago

> But the median price increases seem to take into account all home sales. If most homes sold are not "new", then the comparison is invalid. For example, if 80% of homes sold in this period were not new, then "total square feet sold" only increased by 20% of 50%, i.e., 5%. Yep, good point. > And this showed that at least 20% of a home's sale price is not determined by its value as measured in units of surface area. Rather, it's a vulture economics seller's market in which prices are determined by what people are able to pay for a necessary good, not by what is a fair price for that good. IMO what it showed was that house prices are dependent on people's ability to obtain financing, and when the financing market ground to a halt, people weren't able to obtain the leverage necessary to sustain the price point. That doesn't mean anything about the intrinsic value of the home, IMO. 2008 is not a good example because there was fundamental, structural problems in the market facilitating such transactions. I think the dot-com pop was a much better comparison because there were no structural issues fundamental to the market but rather a drop in desirability.