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Comment by Ekaros | Hacker News Reader

Homes logically really shouldn't be an appreciating asset. After build(including warranty fixes) they should be in best condition they ever will be(unless further invested). And then just wear down from there and require maintenance to even keep functioning. So after 10, 20 or 50 years it should cost less, not more.

I wonder how will this look in let's say 100 or 200 years. That is after we have reached full urbanization. As outside changing demand in different regions the prices should stay same apart from inflation.

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Moreover, housing prices historically have been linked with median wages. Houses should only be worth as much as buyers can reasonably afford. However if you look at this graph you’ll see that house prices have departed from the historical average significantly, as they did in 2008 before the housing crash. https://www.longtermtrends.net/home-price-median-annual-inco...

Responsible buyers are supposed to put less than 30% of monthly income towards housing, but prices require much more than that. This is leading to most owners and renters being cost burdened and unable to save.

Generally you buy the land under the house as well, and this is the part of the pack that is appreciating.

True, but I imagine that at some point that won't be true any more. And in many cases that has already happened. In the end it just comes to betting on right location... See Detroit vs SF.

Much of that appreciation should be taxed away as the landowner unfairly benefits from public spending elsewhere. If a government decides to invest public money in building a good new school in an area, it is not right that the landowners benefit from free appreciation while the renters are forced to pay more.

Much of it is. Property taxes never end and in my experience only go up. Land owners are also bound to the area and assume all the risks associated with that. Renters can just get up and leave with no financial risk.

The landowners also pay more in the form of property taxes, at least where I'm from.

I think this is something that is often forgotten from the raw sales value numbers. House prices appreciate but at the same time significant money is invested into their maintenance and improvements. A house where no maintenance is done will probably depreciate in value as the building deteriorates.

It would be great to see an index of property prices deducting the cost of maintenance and improvements. This is a bit like share indexes where the added value of dividends is included.

Pretty sure this is one reason why passive property speculators prefer flats over houses - houses basically need to be lived in, flats much less so. Ending both home ownership and single-family houses would be a massive gift to property investors.

The materials and labor required to build them gets more expensive though. So while the materials wear down over time, those same materials get more expensive. And some of those materials, especially structural, will last a long time if taken care of.

Furnaces, water heaters, etc go to 0. But foundations, framing/walls, flooring, etc can last hundreds of years.

Part of it is increased size of properties. And increased regulation. But I wonder what are we doing as civilization if the building materials aren't cheaper. Why haven't we gained significant efficiency gains there? Labour really should be in inflation though...

There’s a lot more global demand than before. Homes are made of natural resources like wood and there’s only so much we can harvest and use for construction.

I think we have made some improvements though. It isn’t necessary to build with copper pipes any longer. New construction relies on PEX piping which is cheaper, should last longer, is easier to install and to replace.

But this is just the structure. The cost of flooring, tiles, fixtures, and appliances adds a lot too.

There are many factors that contribute to appreciation and depreciation. Decay is just one of them. There could be other appreciating factors that outweigh the depreciating ones. Also, if you measure the value of something in a generally depreciating currency, you automatically get rising prices (ceteris paribus).

> Homes logically really shouldn't be an appreciating asset.

People have been trying to explain that to the Federal Reserve for decades. They are not interested in hearing about the problems created by moneyprinting.

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