Hmmm, intesting perspective. My parents bought a new house in 1963 for 28k and my mother sold it in 92 for 212k. Are you saying that if they had bought a new car in 63 for say, 3,000 dollars it would have been worth $22,000 in 92?
Well if she bought a 63 vette, no problem...
I meant houses, in general. Naturally there would be single extremes.
But, let me expand a bit on my notion.
I first got it on a study done on stable, white, lower working class neighborhoods, in and around Boston. Pretty much everything was held to a social constant. The neighborhoods had commonly three to four generations in them. No gentrification, no ghettofication. Culturally they stayed the same, white, working class, lower professional Catholics. Further, these were triple deckers, with minimal lot lines, so there was no room for McMansions.
Anyways, held for inflation, prices remained the same.
Another view.
The used car view. Houses are things. For instance I’m a carpenter. A house is a house. It’s a box. You think of your house as a home. Something romantic, personal. Everyone in the trades, the real estate bidness, the banks, it’s just a house, a commodity.
Anyways, why should a used, near worn out, style dated, performance dated product increase in time? It shouldn’t, and doesn’t. ( In a free market )
However, what if through continued zoning, land use planning, you suppress the natural rate of house/neighborhood building? That makes existing supply, worn out as it is, increase in price. Like used Chevy parts in Cuba.
But neither the house itself, nor the used Chevy part increases in value. It is an artificial increase caused by political intervention.
Buffalo NY has ten thousand abandoned free houses. Why? Politics. Politics chased out the industries, the labor left. Lose half your labor, lose more than half your house prices. Ditto Detroit, Cleveland and hundreds of other cities.
We have to throw out house prices in cities that are being politically killed and its citizens fleeing.
We have to throw out rural Texas towns were new fled arrivals from the political death zones have bought O’l Earl’s place that he raise chickens and worked on cars.
Anyways, back to my general statement. House prices are tied to income. Everything held constant, houses rise with income and the inflation rate, such that they require the same amount of labor time to buy. Which makes sense in that a house is really a big pile of skilled, semi and non skilled labor. These two prices or costs, labor and house prices are tied.
(there are other things that cloud the price level of house. Finance as we have all seen these last few years. Taxes, construction innovations( nail guns ).)
A chart by Robert Shiller of Yale on historical home values.
http://www.nytimes.com/imagepages/2006/08/26/weekinreview/27leon_graph2.html