What causes the rising cost of houses?

Answer 1

Employment and Income!! If there is low unemployment and disposable income, people are going to spend money on the area where they spend most of their time.

Answer 2

The rising cost of everything. I found it very interesting today to listen to Pres Bush talk about how the inflation rate is stable. I guess that reflects all the new jobs brought about by the war because I haven't had a pay raise and the price at the grocery store has doubled. When the price of everything rises, the price of housing goes right along with it. Your value on an older home is in what it would take to replace it for the shape its in. If it costs more to buy a new house, the cost of an old house will rise comparably. At least that's my theory. . .

Answer 3

Ditto to the above answer number 1!
Like here is SC. Houses were fairly reasonable until about 7 yrs ago, but when people from the North and people from Florida started moving here the costs went up. The reason was because a home in New York per say would costs $400,000-$600,000 thousand dollars. They could come down here and find a home almost twice as big as the one the had there and here it was half the price. They would tell their friends and more would come down wanting to find the same deals. When people and Realtors saw that people were willing to pay these prices, well, the prices the went up of course!! Money, Money, Money! This really hurts the ones that are residents here already, but what can we do.

Answer 4

The previous answer is quite accurate. The higher the demand the higher the price.Also theres inflation. And if people think prices will go up they think it may be a good investment so they buy more, in turn demand goes up, and in turn prices go up. its a self fulfilling prophecy. Also if theres an increase in disposable income then people are able to buy more and sellers can charge more. Also the relative scarcity plays a factor. If housing is in short supply people are willing to pay more for it.

Answer 5

Many factors ... the economy, expendible income.

But overall, it's supply and demand. As long as someone is willing to pay a higher price, the prices will keep climbing. It's like the cost of gas. If we all stopped buying gas, the oil companies would have to find a way to lower the price. But we are willing to buy gas, no matter what the cost.

Answer 6

Limited supply and increasing demand. The demand increases in an area where employment is rising (such as Everett, Washington, where Boeing is building new airplanes), and decreases in areas where it is falling (such as Detroit, where car production is decreasing). In many areas, such as San Francisco Bay, topography limits the area in which new housing can be built, so supply cannot keep up with demand and prices skyrocket.

Answer 7

When people from NYC and LA move to cities that arent as expensive and house flip and sell it more expensively for having that "coastal big city charm", also when people from cali flock to whatever town is the new trend and flood the market. Like here in Phoenix.