Why is everything so expensive?

You are correct but it 100% is a factor in housing price increase.

Assuming prices are USD for a property located in the USA; In this case, following the inflation rates of the last 40 years. A property purchased for $50,000 USD in 1980 would today be worth roughly $167,526.54 USD purely as a result of inflation.

So where does the extra $92,000 come from?

- Supply and Demand - The more people that want a house, the less houses to go around. Thus people must be prepared to pay more in order to get what they want.

- Home Improvements - Can greatly add to the equity and overall value of a property.

- Location - Has the area's reputation improved, access to employment or services quicker since it's construction.

- Land Prices - This is related to both supply and demand as well as location.

How come you get less for your money?

- Wages have not increased linearly with housing & land prices (As a result, buying power of housing/property/land has decreased)

- Increased demand due to higher populations, again goes back to supply and demand meaning an overall increase due to this case.

- A large number of other stupid finance reasons that I have not researched well enough to feel as though I would be qualified to comment on.

In conclusion, especially since the onset of Covid-19 housing demand has significantly increased (as a result of evictions, consumer demand, increased overall spending etc.). That unfortunately means, at the moment, housing is extremely pricey and I feel for anyone who is trying to get into the market currently, It's a great time to sell, but absolutely terrible to buy.

/r/rant Thread Parent