My parents owned a house in Milwaukee. They paid $30,000 or so for it, in 1980. They sold it for $30,000 or so, in 1988. It's still worth $30,000 or so. This sc

My parents owned a house in Milwaukee. They paid $30,000 or so for it, in 1980. They sold it for $30,000 or so, in 1988. It's still worth $30,000 or so. This scenario was repeated hundreds of thousands of times in Milwaukee alone. My parents paid $80,000 for a house in 1988. They haven't sold it, but it's probably worth around $200,000 today, which is an increase very slightly higher than the rate of inflation. House prices (or, more significantly, house/land/building-permission bundles) where demand exceeds supply (in the US, generally rich coastal areas with tight zoning) are determined by available credit. House prices elsewhere are determined by marginal construction cost. There are a lot of additional complications, many involving the use of single-family-only zoning and the cost of new construction as an implicit or explicit mechanism of segregation in the fair housing era.