There was a question yesterday that generally stated cars lose their value so fast because people don’t know what the previous owner did. That’s fair, but why does that not relate to houses?
In: Economics
When you buy a house, you are paying for two things: the building, and the land it’s on. The building itself doesn’t really appreciate, but the land does – there is a limited amount of land around, so it will go up in value as more people want to live in the same area (and you’d have to do some pretty extreme things to actually damage a piece of land, unlike a car).
There is also a housing shortage – basically fewer houses are being built in places where people want to live compared to the rate at which new people want to move to those places. That in turn makes prices go up with time.
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