Paying more for unique houses could be a rational strategy. Unique houses have higher resale value compared to tract houses because there is more market differ

Paying more for unique houses could be a rational strategy. Unique houses have higher resale value compared to tract houses because there is more market differentiation. Try selling a condo. It's hard to ask more if two or three other identical condos in the building are also for sale. Then try to sell a single family house in a neighborhood with diverse housing. You can charge more because you might find the buyer who really loves whatever is particular about the house. So if you pay more and sell for more it's all a wash. Unless of course the house price is so high that a down payment is unattainable. I would call that a market failure in most cases (Manhattan is an exception). Such a failure is probably symptomatic of political intervention in the market, usually in the form of restrictive zoning and development practices. By all means we should try to standardize and automate home construction. But uniqueness has value to many.