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The frontier has been settled since 1890, but housing prices have been stable from 1950 to 1980, then they started creeping up, with a big burst around 2000 and

The frontier has been settled since 1890, but housing prices have been stable from 1950 to 1980, then they started creeping up, with a big burst around 2000 and another beginning 2018. Desirable can't be the answer.

endisneigh 5y ago
A burst happening has nothing to do with desirability not being the answer. Less desirable areas had bigger bursts. Relatively, desirable areas will always appreciate, by definition. Housing isn't a mass produced fungible commodity like a car. People comparing cars to houses make no sense.
- paulryanrogers 5y ago
  It's a complex issue, though both aren't necessarily wrong. Land is limited and its raw volume rarely changes. Housing could be increased through scaling up, developing greenfield, or redeveloping underutilized land. If housing were thought of more as a consumable than ones primary investment that would accelerate better use of land for housing.
  - endisneigh 5y ago
    Even if zoning didn't exist and land was perfectly used certain property would just be worth more than others. Imagine all of humanity living in a single skyscraper that can be built up indefinitely. Perhaps a condo closer to the ground floor would be more expensive, or maybe at the top, or maybe west, east, etc. Certain land being worth more than others is more a function of the inherent differences in things than anything else.
    - AnthonyMouse 5y ago
      Now you're just making an argument equivalent to "it's not weird that some cars appreciate, look some of the classic Mustangs" instead of distinguishing it from housing in any way. The reason housing increases in value to the extent that it does is that areas where it's in high demand prohibit creating more of it. It would be like prohibiting the construction of new cars. Obviously that would make existing cars cost more in general, independent of the fact that some cars are worth more than others. The problem with your argument is that it's predicated on it being physically impossible to build more housing of the same type that people want. If people prefer to live close enough to the ground that they don't have to ride an elevator for an hour to get there then you build a thousand ten story buildings instead of one ten thousand story building. If people like higher floors because they have a better view then you build two hundred 50 story buildings instead of a thousand ten story buildings. You can build more of whatever the market demands, so the price falls to the construction cost (absent zoning), and remains there because increased demand causes more construction rather than higher prices. To get to the point of true scarcity due to land you would have to need thousand story buildings because covering the city in twenty story buildings wouldn't be enough housing for its population. But even if that's possible in theory, it's not the case anywhere in practice.
      - endisneigh 5y ago
        > The reason housing increases in value to the extent that it does is that areas where it's in high demand prohibit creating more of it. It would be like prohibiting the construction of new cars. Obviously that would make existing cars cost more in general, independent of the fact that some cars are worth more than others. Yes, and the areas that are desirable and the ones that are restricting the construction. Even if we suppose that you allow infinite construction, there will always be certain houses or parcels of land that will cost more, perhaps because of being closer to certain things. Your example ignores reality. It is sometimes just not possible to build more housing that shares the exact same properties of existing houses. If an area is desirable because of nature, then naturally those who first live there will prevent the destruction of said nature that brought them there to begin with.
        AnthonyMouse 5y ago
        > Even if we suppose that you allow infinite construction, there will always be certain houses or parcels of land that will cost more, perhaps because of being closer to certain things. In which case those parcels of land would end up with high density housing on them so more people can live near those things, until such time as the cost per square foot falls below the construction cost. > If an area is desirable because of nature, then naturally those who first live there will prevent the destruction of said nature that brought them there to begin with. "Nature" e.g. Montana or Alaska or the Ozarks. Do you believe these to be the places with high land costs and restrictive zoning laws?
        endisneigh 5y ago
        > In which case those parcels of land would end up with high density housing on them so more people can live near those things, until such time as the cost per square foot falls below the construction cost. Why would this happen? You're talking about the construction of more housing like it's free. Perfect example of this is something like Chicago - let's say you live right near the loop and are fortunate enough to have a SFH that's huge. The land is worth a lot, and you like your lifestyle. Sure in some perfect world that house would be purchased and turn into a high rise, but you want to live near the loop and have a SFH. Therefore that house will be expensive. Others in similar situations will do the same. Later more people will come to Chicago and see that they want that lifestyle as well - these types of houses will then command a premium. Not everyone will sell to a developer to turn it into a high-rise. > "Nature" e.g. Montana or Alaska or the Ozarks. Do you believe these to be the places with high land costs and restrictive zoning laws? Are those areas desirable? I've never been.
  - Supermancho 5y ago
    > If housing were thought of more as a consumable than ones primary investmen Housing would be "thought of" differently, if property depreciated. Has nothing to do with how people think, but optimal financial strategy. Is there a way to solve it without taxation? Deflating the currency moves the window, but it leaves the status quo trend.
  - kkjjkgjjgg 5y ago
    House prices also appreciate when the surrounding area becomes more attractive. People call it "gentrification" and hate on it, but the reality is that the surrounding area is being improved (meaning nicer shops, better facilities, access to jobs and hospitals and so on), which is a good thing.
- deleted 5y ago
  [deleted]
codingdave 5y ago
Housing prices in the US in 1980 were almost 7x what they were in 1950. Where are you getting the idea that they were stagnant for those decades?
- HarryHirsch 5y ago
  Piketty has the goods (on page 19), and adjusted for inflation they were stable: http://piketty.pse.ens.fr/files/Schularicketal2014.pdf http://piketty.pse.ens.fr/files/Schularicketal2014.pdf You can argue about his conclusions, but you cannot argue with data. People today have no idea about the percentage of income that went into housing back then. It was really small! In my corner of the nation (rural), fixer-uppers that no bank will give you a mortgage on are going for 150 kUSD and more! That's > 125 USD/ft^2! It's madness!

endisneigh 5y ago

A burst happening has nothing to do with desirability not being the answer. Less desirable areas had bigger bursts. Relatively, desirable areas will always appreciate, by definition. Housing isn't a mass produced fungible commodity like a car. People comparing cars to houses make no sense.

paulryanrogers 5y ago
It's a complex issue, though both aren't necessarily wrong. Land is limited and its raw volume rarely changes. Housing could be increased through scaling up, developing greenfield, or redeveloping underutilized land. If housing were thought of more as a consumable than ones primary investment that would accelerate better use of land for housing.
- endisneigh 5y ago
  Even if zoning didn't exist and land was perfectly used certain property would just be worth more than others. Imagine all of humanity living in a single skyscraper that can be built up indefinitely. Perhaps a condo closer to the ground floor would be more expensive, or maybe at the top, or maybe west, east, etc. Certain land being worth more than others is more a function of the inherent differences in things than anything else.
  - AnthonyMouse 5y ago
    Now you're just making an argument equivalent to "it's not weird that some cars appreciate, look some of the classic Mustangs" instead of distinguishing it from housing in any way. The reason housing increases in value to the extent that it does is that areas where it's in high demand prohibit creating more of it. It would be like prohibiting the construction of new cars. Obviously that would make existing cars cost more in general, independent of the fact that some cars are worth more than others. The problem with your argument is that it's predicated on it being physically impossible to build more housing of the same type that people want. If people prefer to live close enough to the ground that they don't have to ride an elevator for an hour to get there then you build a thousand ten story buildings instead of one ten thousand story building. If people like higher floors because they have a better view then you build two hundred 50 story buildings instead of a thousand ten story buildings. You can build more of whatever the market demands, so the price falls to the construction cost (absent zoning), and remains there because increased demand causes more construction rather than higher prices. To get to the point of true scarcity due to land you would have to need thousand story buildings because covering the city in twenty story buildings wouldn't be enough housing for its population. But even if that's possible in theory, it's not the case anywhere in practice.
    - endisneigh 5y ago
      > The reason housing increases in value to the extent that it does is that areas where it's in high demand prohibit creating more of it. It would be like prohibiting the construction of new cars. Obviously that would make existing cars cost more in general, independent of the fact that some cars are worth more than others. Yes, and the areas that are desirable and the ones that are restricting the construction. Even if we suppose that you allow infinite construction, there will always be certain houses or parcels of land that will cost more, perhaps because of being closer to certain things. Your example ignores reality. It is sometimes just not possible to build more housing that shares the exact same properties of existing houses. If an area is desirable because of nature, then naturally those who first live there will prevent the destruction of said nature that brought them there to begin with.
      - AnthonyMouse 5y ago
        > Even if we suppose that you allow infinite construction, there will always be certain houses or parcels of land that will cost more, perhaps because of being closer to certain things. In which case those parcels of land would end up with high density housing on them so more people can live near those things, until such time as the cost per square foot falls below the construction cost. > If an area is desirable because of nature, then naturally those who first live there will prevent the destruction of said nature that brought them there to begin with. "Nature" e.g. Montana or Alaska or the Ozarks. Do you believe these to be the places with high land costs and restrictive zoning laws?
        endisneigh 5y ago
        > In which case those parcels of land would end up with high density housing on them so more people can live near those things, until such time as the cost per square foot falls below the construction cost. Why would this happen? You're talking about the construction of more housing like it's free. Perfect example of this is something like Chicago - let's say you live right near the loop and are fortunate enough to have a SFH that's huge. The land is worth a lot, and you like your lifestyle. Sure in some perfect world that house would be purchased and turn into a high rise, but you want to live near the loop and have a SFH. Therefore that house will be expensive. Others in similar situations will do the same. Later more people will come to Chicago and see that they want that lifestyle as well - these types of houses will then command a premium. Not everyone will sell to a developer to turn it into a high-rise. > "Nature" e.g. Montana or Alaska or the Ozarks. Do you believe these to be the places with high land costs and restrictive zoning laws? Are those areas desirable? I've never been.
- Supermancho 5y ago
  > If housing were thought of more as a consumable than ones primary investmen Housing would be "thought of" differently, if property depreciated. Has nothing to do with how people think, but optimal financial strategy. Is there a way to solve it without taxation? Deflating the currency moves the window, but it leaves the status quo trend.
- kkjjkgjjgg 5y ago
  House prices also appreciate when the surrounding area becomes more attractive. People call it "gentrification" and hate on it, but the reality is that the surrounding area is being improved (meaning nicer shops, better facilities, access to jobs and hospitals and so on), which is a good thing.
deleted 5y ago
[deleted]

codingdave 5y ago

Housing prices in the US in 1980 were almost 7x what they were in 1950. Where are you getting the idea that they were stagnant for those decades?

HarryHirsch 5y ago
Piketty has the goods (on page 19), and adjusted for inflation they were stable: http://piketty.pse.ens.fr/files/Schularicketal2014.pdf http://piketty.pse.ens.fr/files/Schularicketal2014.pdf You can argue about his conclusions, but you cannot argue with data. People today have no idea about the percentage of income that went into housing back then. It was really small! In my corner of the nation (rural), fixer-uppers that no bank will give you a mortgage on are going for 150 kUSD and more! That's > 125 USD/ft^2! It's madness!