A missing part to your counter-scenario would be that by and large, there has been no innovation in construction methods/producivity in homebuilding in that same time period.

Possibly prefab and different building materials but those have largely situated themselves in commercial/industrial.

The other bucket of goods has been subject to all kinds of innovation, optimization, offshoring etc. You can't offshore homebuilding so it largely has participated in the full cost increasing effect of inflation, compliance issues, regulatory capture etc whereas many of those other goods have been able to escape lots of those impacts in addition to be the benefit of having the foreign source countries outsource their deflation to us.

Sims said:

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A missing part to your counter-scenario would be that by and large, there has been no innovation in construction methods/producivity in homebuilding in that same time period.

Possibly prefab and different building materials but those have largely situated themselves in commercial/industrial.

The other bucket of goods has been subject to all kinds of innovation, optimization, offshoring etc. You can't offshore homebuilding.

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I think "missing part" understates it. "One underlying cause" is more appropriate.

That might make a good thread, WTH are houses so expensive? But probably several out there already.

Over_ed said:

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I'm more than a bit skeptical, but go ahead and convince me. BTW, I don't disagree that inflation has been understated.

You compare the price of gold to that of houses. And then imply houses in 1985 were really almost twice as expensive as now. OK, let's continue with your example...

Look at any comparable good or service, going from 1985 to present. Almost all will show that they were even MORE EXPENSIVE in 1985 compared with today. That is, if houses were twice as expensive (1.8 with your example) a bundle of goods, food, energy would likely be greater than 4X as expensive in 1985 as today.

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I'm not sure that I understand your point here. The natural order in a free market is for things to become less expensive. My point was that housing is no different. All things being equal, in a free market almost all goods and services should get less expensive. A price reduction of 50% over 40 years does not seem unreasonable to me at all. If anything that doesn't sound like enough.

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You want to use gold as your standard. Fine. And, yeah, no doubt we should not have gotten off the gold standard, but that ship sailed.

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I don't "want" to use gold as a standard. I just don't know of a better alternative. Anyone who's a sound money advocate knows of this saying. "One ounce of gold would buy you a nice suit (toga) in Ancient Rome, and it will still buy you a nice suit today." Purchasing power is remarkably stable in terms of gold. I'm not aware of a more reliable method of comparison. You can't use a basket of commodities because of a ton of factors that would affect the price. Gold is the least affected by those factors so it's the best option.

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Home buyers (and their lenders) generally look at one thing - percentage of income they put toward a house. And I strongly suggest that your "gold-based" numbers do not reflect that in any way, shape or form. You are confounding inflation and gold appreciation, and are not looking at the change in costs of other things and services consumers could buy instead of a house.

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That's not true at all. I had extremely low income for a while but a lot of hard assets. I had everything invested in my business. The lender saw exactly what was going on so I qualified for a much larger loan than my income would normally have justified. And no I'm not confounding gold appreciation with inflation. In fact, I believe you are the one who is doing that. I don't consider gold as an investment. The gold price isn't going up because it's increasing in value. Gold is basically the exact same today as it was in Ancient Rome. The price is going up because the dollar is going down in value.

Sims said:

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A missing part to your counter-scenario would be that by and large, there has been no innovation in construction methods/producivity in homebuilding in that same time period.

Possibly prefab and different building materials but those have largely situated themselves in commercial/industrial.

The other bucket of goods has been subject to all kinds of innovation, optimization, offshoring etc. You can't offshore homebuilding so it largely has participated in the full cost increasing effect of inflation, compliance issues, regulatory capture etc whereas many of those other goods have been able to escape lots of those impacts in addition to be the benefit of having the foreign source countries outsource their deflation to us.

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Still waiting on these.
6 Examples of Robotic Bricklaying and OnSite Assembly in Construction

• Robotic automation is making inroads into the construction sector, taking over repetitive and labor-intensive tasks. Robotic bricklaying and on-site assembly technologies aim to boost productivity, improve safety, and address skilled labor shortages