Why does the value of a house appreciate, while the value of a car depreciates?

Answer 1

Not true. I bought a 1967 Pontiac GTO in 1999 that's appreciated 400%.

Answer 2

Usually the value of a house appreciates, but not always.
Usually the value of a car depreciates, but not always.
Compared to cars, houses have a very long useful life and have to stay where they are built. Thus the location plays an important part in value. If you had access to an Economics wizard, you might find that houses do not appreciat as much as it appears, when factoring in inflation, changes in building style and materials, and so on.
Cars have a relatively short useful life, maybe ten years. There are way more used cars available for sale than there are buyers. There is a wholesale value and a retail value to cars. Dealers buy at wholesale and sell at retail. There is no wholesale market in houses. Owners sell directly to buyers.
In both cases the laws of supply and demand apply. Lots of used cars available, so supply outstrips demand, and prices drop.
With houses, supply is not always greater than demand. When demand outstrips supply, prices go up.

Answer 3

Actually both depreciate, because of ware and tear. A house built 50 years ago has more maintainance to be done on it then a house built yesterday. The same is true with cars.

However, you cannot buy house by itself. You must also by land. Land generally appericiates in value, because there is a limit supply--they are making more it--and each piece is unique.

Answer 4

Even with all the skyscrapers, the demand for housing exist. More people tend to live in bigger houses with life style changing. While the construction cost's apprection is lower, the land cost spirals up. Hence an existing house has still demand thus gets a better vallue.(immovable property). Cars come every year dime a dozen with improved comfort and safety. This also is a status symbol and people tend to own newer cars. Natually older cars do not get better value.(movable property)
Ramachandran V.

Answer 5

A house appreciates,because the price of living goes up, demand for houses in your area, plus any work you put into your house makes it worth more. As for cars....the more miles it has, the less it is worth in most cases. Everyday wear and tear you put on your vehicle makes it depreciate.

Answer 6

Real estate is comprised of LAND and ATTACHMENTS to the land.

The land tends to appreciate as its scarcity increases (IE, if you get land in the suburb and the town grows around it, it becomes more valuable) or as other real estate develops (like you're suddenly next to a shopping mall).

The attachments to the land add some value, but they might or might not appreciate.

Answer 7

The supply of houses is limited compared to that of cars. Couple that with the fact that the lifespan of a car is significantly less than the lifespan of a house.

Answer 8

well as far as the car is concerned.. it is because you use that assest and depreciate the value..

Answer 9

good question