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Supply and demand. A house which is 60 years old and has changed hands many times doesn't cost X because the owners are still paying off the materials. It's bec
by gexla 14y ago
Supply and demand. A house which is 60 years old and has changed hands many times doesn't cost X because the owners are still paying off the materials. It's because demand is driving up the cost. Even with cheap materials, the land the house sits on may still be scarce (depending on the location.)
- mpg33 14y agoSo in a sense housing will always be expensive because of scarcity of land and demand for housing?
- gexla 14y agoAgain, it depends on demand vs supply. Land in the middle of nowhere in Alaska is abundant with little demand, so land there isn't considered scarce. In Manhattan, New York, demand causes increased living space to be created by building upwards. In San Francisco, city restrictions on building heights limit supply (can't stack as high vertically as you can in Manhatten.)