This is not correct, both land and structure have differing but related values. With persistently increasing construction complexity and building code, replacement cost generously outpaces existing building value. At least from a USA perspective, many neighborhoods are stuck with older, dated housing stock that would be aesthetically better off scraped and rebuilt in modern form, but the existing home is too valuable and ground-up new construction too expensive relative to market.
In typical US middle-income neighborhood, a scraped lot isn't worth much because the cost to build a suitable replacement home is too high, above market rates per sf of living space. Its a risky investment, but someone may agree that the value is worth it and buy it down the road, or maybe not. The same home site with a decent (but boring) home in good marketable condition will be priced relative to median incomes and market values of surrounding neighbors. The home structure is the valuable, appreciated component in this scenario.
Home ownership certainly is an investment vehicle- tradable and you can gain or lose lots of money on it! its also the largest single investment for most/many people. Many investments have operating and maintenance costs, nothing wrong with having to fight some depreciating elements in an investment.
Land value is important. Structure value is important. Pin the failure on viewing homeownership as a "sure bet, can't lose" investment causing too many people to aim to high above market.
> With persistently increasing construction complexity and building code, replacement cost generously outpaces existing building value. At least from a USA perspective, many neighborhoods are stuck with older, dated housing stock that would be aesthetically better off scraped and rebuilt in modern form, but the existing home is too valuable and ground-up new construction too expensive relative to market.
Is this not NIMBY-ism? You either need to build a new house that is very expensive OR you can just buy my little shit-shack that is grandfathered in. It's a bargain in comparison - believe me! Either way, pay me lots of money or increase the value of my property indirectly.
Not NIMBY, that’s a separate, complicated issue. I’m just referring to the intrinsic value of an existing structure, replacing like for newer like, in a rational “middle America” market (not california).
In typical US middle-income neighborhood, a scraped lot isn't worth much because the cost to build a suitable replacement home is too high, above market rates per sf of living space. Its a risky investment, but someone may agree that the value is worth it and buy it down the road, or maybe not. The same home site with a decent (but boring) home in good marketable condition will be priced relative to median incomes and market values of surrounding neighbors. The home structure is the valuable, appreciated component in this scenario.
Home ownership certainly is an investment vehicle- tradable and you can gain or lose lots of money on it! its also the largest single investment for most/many people. Many investments have operating and maintenance costs, nothing wrong with having to fight some depreciating elements in an investment.
Land value is important. Structure value is important. Pin the failure on viewing homeownership as a "sure bet, can't lose" investment causing too many people to aim to high above market.