2 ms·

The overall value of a "house" is the value of the structure plus the value of the land, and it's common for the former to depreciate while the value of the lat

by giaour 4y ago

The overall value of a "house" is the value of the structure plus the value of the land, and it's common for the former to depreciate while the value of the latter increases. Construction costs have gone down over time (adjusting for inflation), and most building materials degrade. When I was looking for a house in Seattle, many of the $800K bungalows were sold with the expectation that the buyer would level the existing house and build something new. During the same time frame in the rust belt (particularly Detroit) , however, many housing parcels were sold for less than the value of the structure due to the undesirable location of the land.

mistrial9 4y ago
this makes sense, yet there is another lense to view valuation. The value of the house is in the legal statement of ownership. What is owned is important of course, but the legal statement of ownership itself is traded for these values. A corollary is that the ability to trade ownership records is a gating factor. "Do not cast your gaze here, these fine things are not for the likes of you" .. is a poetic line from the point of view of someone that is outside that line.
- giaour 4y ago
  > The value of the house is in the legal statement of ownership. What is owned is important of course, but the legal statement of ownership itself is traded for these values. And yet, I own many worthless things that also exhibit that property (like a picture my niece drew of me and my cat). There is a totemic quality to possessing something, but that is almost always personal and independent of the thing's market value. Outside of "collectible" properties (structures with historical significance like castles or Frank Lloyd Wright houses), houses have a market value related to the imputed rent they produce and potential productivity of the land.
  - mistrial9 4y ago
    yes agree -- the insight is into the additional restrictions on access. Market values react to scarcity in most cases. The legal titles, the ability to obtain and dispense of loans, the ability to exchange titles and resolve blocks in titles, contribute to the valuation. In the case of a child's drawing, very few impediments exist to exchange or declare title to that one drawing, and there is little scarcity since most children draw a lot of pictures.

by giaour 4y ago

mistrial9 4y ago

this makes sense, yet there is another lense to view valuation. The value of the house is in the legal statement of ownership. What is owned is important of course, but the legal statement of ownership itself is traded for these values. A corollary is that the ability to trade ownership records is a gating factor. "Do not cast your gaze here, these fine things are not for the likes of you" .. is a poetic line from the point of view of someone that is outside that line.

giaour 4y ago
> The value of the house is in the legal statement of ownership. What is owned is important of course, but the legal statement of ownership itself is traded for these values. And yet, I own many worthless things that also exhibit that property (like a picture my niece drew of me and my cat). There is a totemic quality to possessing something, but that is almost always personal and independent of the thing's market value. Outside of "collectible" properties (structures with historical significance like castles or Frank Lloyd Wright houses), houses have a market value related to the imputed rent they produce and potential productivity of the land.
- mistrial9 4y ago
  yes agree -- the insight is into the additional restrictions on access. Market values react to scarcity in most cases. The legal titles, the ability to obtain and dispense of loans, the ability to exchange titles and resolve blocks in titles, contribute to the valuation. In the case of a child's drawing, very few impediments exist to exchange or declare title to that one drawing, and there is little scarcity since most children draw a lot of pictures.