Another Theory on Home Prices
I just read that one of the reasons we have such expensive houses is that houses are getting bigger.
I have to say: that's one trend that has been staring us all in the face, and most statistics take no note of it. As little 20 years ago, the square footage of a "big" house was likely 10-20 % less than today.
I got a personal experience of this yesterday when my wife and I went and toured a home. It was in a great location and seemed a perfect choice for us, despite the fact that we'd been thinking about staying put where we are for a bit. We both agreed that if we liked the place, it would be worth a move, just based on the location in our favorite part of town.
After the tour, my wife commented about being able to live in a "small" house. The house was just about 20 years old, and rather than 2700 or 2800 square feet of the places we've been looking at lately, it was a "mere" 2200-2300 square feet.
Keep in mind that this is still a about 500 square feet more than we are living in now; plus, the basement was fully finished. (However, that can't be included in the square footage because of some rule around here about not being able to include any space in a total square footage if it is below "grade".)
These bigger and bigger homes have been coming on the market for a long time now. Of course, if there's more house, there's more price that goes along with it. And this bigger house mentality has crept into our consciousness, making us look for more house too.
Rather than stepping up to a big price tag, I think we're going to get our additional square feet from renovating our basement -- whether we can count that extra space as part of our total square footage in a real estate ad or not.