Why does the value of land/real estate increase over time? Other commodities deflate or are unstable, what makes land a good investment most of the time?
In: Economics
Bubbles-aside, this is largely due to the fact that the value of $1 decreases over time. Factor in the basic law of supply and demand and things can go wonky really fast. Look at some parts of the nation during the last housing crash. Particularly Detroit. Other parts of the nation exploded in value. This side of the equation looks at if the property is where people want to be. If they don’t, it won’t increase in value any more than the standard percentage of inflation, and it may actually lose value.
Generally though, things that are not being made anymore (that lots of people want) are stable investments. Precious metals and land being two of the top investments.
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