On "housing bubbles" and inflation

[jhetley]

Once upon a time, my parents bought the house in Georgia for $25,000.  I know this, because we came across the documents when we cleaned out after Mom died.  This price was from the mid 1950s.  The executor sold the place for $200,000, "as-is" with maybe 15-20 years of deferred maintenance.  We did not hold out for a better price.*

That is the same house, no additions and damn few system updates, performing the exact same function in the exact same neighborhood.  The 8x increase represents forty years of inflation, pure and simple.

If that sale price dropped 50% in the current market, it would still represent inflation.

*(And then we paid estate tax on the proceeds, but that's another rant...)

Comments

[wcg.livejournal.com]

$25k in the mid-50s in Georgia must have bought a heck of a nice house! I remember my parents buying a 5 bedroom house in Tucson in 1969 for $18.5k, and I thought *that* was pretty nice. I think the last time that house sold it went for over half a mil.

[jhetley.livejournal.com]

Yeah, it was relatively new (about 5-10 years old), large lot, in a good (white) neighborhood at the edge of the metro area at that time.

We probably could have gotten at least another 50 K for it if we'd fixed it up. I'm still amazed that we didn't have to rewire the place just to sell it -- no GFI circuits, ungrounded outlets, etc.