I know Derek Thompson knows this, but there's no mystery here: home ownership consists of owning two distinct classes of property, a depreciating structure and (potentially) appreciating land. Land isn't mentioned in the article somehow, though.
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Land is only a minor driver for valuations in metro areas. When buying a house outside of Boston, I pulled transaction data, ran some (imperfect) regressions, and ZIP code, sq ft, and # of bathrooms were the only significant variables. Together they explained >90% of the price. I’m fun at parties.
What variable related to land are you including? I don't think there's much difference for a given plot of land if it's slightly larger or smaller, just what it's zoned for / what can be built as of right
Nothing fancy, just total plot size (which did vary widely in the area I was looking at). Should also add I was only looking at existing stock, single family detached homes. But even within that specific slice, if buildings actually depreciated, you’d think sq footage would matter less than it does.
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