Because it's certainly true that there have been real (not just nominal) housing cost increases, but my understanding is the increase is much less extreme if you compare apples to apples.
Americans have just decided to consume a lot more square-footage of living space than they used to, is a large part of the story outside of tightly constrained markets.
Doesn't the Shiller index account for that? It's currently at 307 compared to 213 two years ago. A decade ago it was 134. Hard to look at the curve and avoid the conclusion that things are way more expensive now than anytime in the past.
Yes, Case-Schiller index is same-home sales. The only thing it doesn’t account for is upgrades/additions but I doubt those are prevalent enough to change the numbers much.
I suspect in most cities it is the land that is valuable not the house. Even the 1940s-1950s houses where I live are selling for 800k. I suspect that an empty lot would sell for slightly more since they get immediately torn down and something bigger put up whenever they sell. And I am just in some random suburb of a city that is not even close to top 10 in terms of population or wealth.
We also have higher population and it’s literally illegal to build houses like many that are in the older/cheaper parts of town. The sq ft of the “minimal viable house” keeps growing.
Because it's certainly true that there have been real (not just nominal) housing cost increases, but my understanding is the increase is much less extreme if you compare apples to apples.
Americans have just decided to consume a lot more square-footage of living space than they used to, is a large part of the story outside of tightly constrained markets.