Quote:
Originally Posted by Arktikos
US home price up 5X, Oahu 8X.
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Median single family house value (Honolulu) in 1985 was $158,600
Median single family house value (US average) in 1985 was $84,300
Current median single family house in Honolulu is $1,000,000 plus or minus.
Current median single family house in mainland is $460,000, give or take.
Mainland prices are up 5.5X from 1985
Honolulu prices are up 6.3X from 1985
This is tracking fairly closely. Considering we are unique in that we can't expand across more land here you would expect the median value delta to be much higher.
The big driver in higher housing cost is regulatory. Every year that goes by the government makes it more difficult to build a home. Safety/health/well-being, fire, earthquake, hurricane/storm, flooding, rising oceans, environmental requirements all drive costs up significantly. Every year there is new legislation added. It takes much longer to design and build a home today than in the past. Nimbyism is HUGE at increasing housing costs and that will only get worse over time. More recently, the era of massive tariffs has also driven material costs up markedly. Further increasing domestic production of building material will only drive costs up more. Reduction in immigration is driving costs up as cheap labor disappears with each passing day. Unions and apprenticeship programs are increasing costs dramatically. Insurance costs due to workmanship claims has been far outpacing inflation. And most importantly, people don't want to work in construction anymore. Each subsequent generation is lazier and physical work-averse than the prior generation. This is expected as reducing physical labor is synonymous with evolution. Therefore the skilled construction labor pool shrinks every year. This will drive up the cost for all skilled laborers in the future as demand will far outstrip supply of these workers. Technology is also not assisting home building. Yet it is driving the cost of many things down. Just not housing. Robots that can plumb or wire a home are possibly 50+ years out. The current 3D printed homes while cool are hilariously expensive and will never scale, at least for several decades at best. Robots just aren't good at working in new environments every time they start a job. It's a centralized technology and housing clearly is not. Remember the pre-fab, container home fad that was supposed to revolutionize home construction... Possibly the biggest expectation fail ever.
If people think housing is expensive now, give it another 10-15 years.