Interest rates is much of it. Just calculate the total payments for a 30y, 100k mortgage in 1980 when the interest rate was 15%. It's 455k in total. The same amount as a 300k mortgage for today's 3% interest for 30 years, also 455k total. In other words, the monthly payments / total payments are the same and thus just as affordable at 3x higher prices, simply because interest rates dropped so much.
Second, there's indications of further concentration. If you have a 10x10 square of land and 100 people, you can each live on one square (spread-out) You can also all live on one square (concentrated). The price levels of the homes in the lived-squares of course grows the more we concentrate, even if total population is constant.
Concentration isn't a straight-line, e.g. NY depopulated in the 80s, but does tend to arc towards further urbanisation, further concentration, further population density. In large part because cities are knowledge/network centres, and our economy is based on knowledge/networks, whereas before our economy was based on e.g. agriculture, which is the opposite of concentrated. I'd be very interested to see if that will ever change due to a working-from-home / remote-work, and even virtual reality to have meaningful social and entertainment experiences remotely. It used to be if you lived in a small town, there'd be few jobs, few bars to meet people, few concerts to go to, no cinema. Many moved to the city despite higher prices, less room, noise and pollution and crime, in search for work and social life. But with remote work and VR, the calculus might change. (not 100%, but many a little bit, enough to bring a little bit of balance to the ever-growing concentration of people in a few big cities).
Second, there's indications of further concentration. If you have a 10x10 square of land and 100 people, you can each live on one square (spread-out) You can also all live on one square (concentrated). The price levels of the homes in the lived-squares of course grows the more we concentrate, even if total population is constant.
Concentration isn't a straight-line, e.g. NY depopulated in the 80s, but does tend to arc towards further urbanisation, further concentration, further population density. In large part because cities are knowledge/network centres, and our economy is based on knowledge/networks, whereas before our economy was based on e.g. agriculture, which is the opposite of concentrated. I'd be very interested to see if that will ever change due to a working-from-home / remote-work, and even virtual reality to have meaningful social and entertainment experiences remotely. It used to be if you lived in a small town, there'd be few jobs, few bars to meet people, few concerts to go to, no cinema. Many moved to the city despite higher prices, less room, noise and pollution and crime, in search for work and social life. But with remote work and VR, the calculus might change. (not 100%, but many a little bit, enough to bring a little bit of balance to the ever-growing concentration of people in a few big cities).