Why are house prices so expensive.?

Answer 1

Well they wern't in 1988 when I bought mine for £36,000!

Now worth £250,000 and I dont get it either!

Answer 2

A couple of things play into housing prices. First is probably supply and demand. The more in demand houses are and the fewer that are available, the higher the prices will be. Right now, the opposite is true. There is a big supply and demand is low so prices are low.

Inflation plays a part in home prices. As inflation goes up, prices go up. The cost of materials for new homes has an effect. As prices go up, so do the home prices.

Local demographics affect housing prices. The more affluent an area is, the higher the prices will be. For example a home in New England will cost considerably more then the same house in the South.

I hope this gives you some useful information

Answer 3

It's all about the law of supply and demand. Houses are not expensive at all in many parts of the country. Why? No one wants to live there! In some geographic locations, land is so developed that there are no more places to build, therefore the prices go up. Lakeshore, for example, is at a premium because they just aren't making any more lakes these days. The other factor that is driving prices is the interest rates. In a 6% rate environment a home that costs 200,000 can be purchased by more people than when the rate is 10%, therefore, more demand.

Answer 4

I thought most answers could be at least part of the reason, but someone did not like them. Here are my thoughts; The Building Society's must take a lot of the blame, for continually increasing the amount of cash they will advance on your salary, one has just put it up to 5 times, one will now let 5 people share so they can pay the higher prices How long will it be before we have three generations having to pay for the same house. That seems strangely like renting to me.The winners are the ones at the top of the tree, the losers, the first time buyer

Answer 5

Supply and demand. Too few houses, too many people wanting to buy them. Also, depending on the area, the land can be very expensive. Especially in crowded, big cities.

Low interest rates make it possible for people to bid up the price of a house. If interest rates were higher, people could not borrow as much, and couldn't pay as much for houses.

Answer 6

Because of the shortage of houses. Most were snapped when houses were reasonable on Buy to let mortgages for the renting market. Another reason is the divorce rate. There are now two people looking for property at the lower end, hence double the housing needs. There are also lots of other reasons but these two are the main two.

Answer 7

Do you relay think the price are so high naturally?? Any time there are big time profit you better know why since it is big red flag of fraud or some other below the Bord conduct. Just look at Enron, worldcom and all the other big bust they had great profits till it all collapsed over night.
There is a big scam going on that is how the price are throw the roof no pun intended. Check out this web site to see how the bubble was made.
http://www.breakingbubble.com/index.htm

Answer 8

house prices are coming down since the last year - give it another year and then prices will have dropped even more

as to how they got high in the first place - no simple answer, there was a "bubble" whereby an asset becomes overspeculated on and people just get caught up in the buying frenzy

there were other factors also, like monetary policy, consumer confidence, inflation, and even bond prices

Answer 9

Clever little manipulation of the economy by the republicans. We were headed for a crash post 9/11. They thought the war would kick us back into gear (this is the traditional way to fend off depressions). It didn't work so they dropped the prime lending rate to a ridiculously low level. This neccesitated refinancing by nearly every home or property owner in the United States. This made instant wealth for millions of people, extra spending for the economy and a buying frenzy as people upgraded their homes or bought for the first time. Trillions of dollars was pumped into the economy.
Now we have to pay for this feeding frenzy with huge debt. Now houses are far out of reach for many Americans.

Answer 10

its always been that way when i purchased my 1st house in the 80's at £48,000 it was going over my buget and then again in 1991 when i bought a house for £83,000 it was really expensive and we struggled. the house is now worth £400,000 im not living there anymore though. but to be a first time buyer has always been a struggle its not anything new

Answer 11

Government policy. If they keep interest rates low and a housing shortage the middle classes will keep moving to bigger homes and "investing" and borrowing against the speculative increase in the value of their homes - until the bubble bursts - then whoops - bankruptsy! But Greedy Gordon won't allow all those houses to be built - it will be political suicide.