Price per square foot for housing has remained remarkably constant over time. People are spending more on houses than they used to because they are buying bigger houses.
It comes down to NIMBY local regulation enacted by the boomers with their FU I got mine attitude. Municipalities enforce size restrictions, ie you can't build too small, in order to ensure there isn't housing poor folk can afford. They enact parcel size restrictions which means a piece of land that could have 20 homes on it can only fit 5. They enact stricter and stricter building codes that the only way to make a profit for a builder is to build big and cram in features so the real estate agents can beat you over the head with them so you feel as though you'd be an idiot not to buy this massive house with things you don't need.
What kind of area has these rules and who sets them? To me a lot with 5 acres is officially "the country" where I would expect very little to zero regulation of what you can build.
Same thing would apply to shooting a gun on your property. If you can do it without the cops coming, you live in "the country" as far as I'm concerned.
http://www.newcanaan.info/filestorage/9490/293/331/02zoningm...
They used to go by the name of Jim Crow.
Taking the aggregate is deceptive because housing is much cheaper in economically depressed areas of the country.
Edit: Looked at the source of your data. It includes only new homes, and ignores existing housing stock. Your entire argument is deceptive and wrong. I regret wasting my time reading the source and realizing that you are cherry-picking.
It was never $1,455/sq ft like it is today in Palo Alto, nor $500/sq ft or even $200 per sq ft. This is a recent phenomena.
Furthermore, price per square foot actually tends to increase nowadays on smaller homes, where you'll pay even more per square foot if you're trying to buy anything under 2000sq ft, and it gets really crazy when you approach 1200sq ft.
Shop around for a house, see for yourself.
You'll encounter it yourself if you ever shop for a home out here.
One would think it's a kind move to not tax them on the actual value of their property, but everything else gets more expensive too, so now a quesadilla is $15 at the corner store and they can barely afford to eat, and their options for other housing are in a different state. It's very strange to me that people aren't taxed out of their homes, since if they can no longer pay for anything else in the area, their quality of life goes down dramatically , in a community who mostly just wants them gone, fighting against the merciless tide of economic "progress" just because they grew up there (and sometimes not even).
If you can't afford the rent, you have no say. Property tax is a form of city rent, from my perspective. Why are the rules different? It seems like people just like to pretend they can still afford to be in a place and resist the change for as long as possible rather than accept the world around them.
You're saying that because they don't have the financial wiggle room to make their property something you want to look at they should GTFO?
That is not accounted for by sq footage. Interest rates are a much more likely culprit.
To expand on that a bit: Supply and demand in houses doesn't work on the price. Supply works on the price; demand works on the monthly payments. When interest rates go down, the same people can now spend more on a house for the same monthly payments, and so the price rises.
CPI has a component of "owner's equivalent rent", which should be removed before cost-correcting the price of housing. Otherwise, you are removing the increase of the item you are searching for an increase of (Housing accounts for 1/3 of the CPI correction.) Their graph is instead showing that the buying power of a dollar is roughly constant when 1/3 of the CPI basket-of-goods is corrected with CPI.
Calculated Risk has a more sane analysis, you will note that the graphs are corrected with "CPI less Shelter": http://www.calculatedriskblog.com/2016/11/real-prices-and-pr... He doesn't include price/sqft, but note that there is a 44% increase in real prices between the 90s and now. Square footage has not gone up by that much in 20 years.
As a side note: AEI is a fairly political org, I wouldn't rely on their accuracy for anything involving stats, or math in general.
However this is only new homes, not used homes.
http://www.aei.org/publication/todays-new-homes-are-1000-squ...
It's terrifying watching Zillow on a few Midwestern cities that had avoided the bubbles so far. It seems as if the coastal cash and / or Chinese money has now trickled its way inward. 25% price increases in 2 years for some of the newer condos I'm interested in.
I don't want to move just yet cause I like my job and wouldn't be able to find something similar in a smaller city, but now I fear I'll be priced out again. This sucks.