> the value the owner derives from the house is not dependent on the resale value of the house
It often is, instead. Eg the resale value of my flat increased because the area where I live became a better place.
It often is, instead. Eg the resale value of my flat increased because the area where I live became a better place.
If the area around you is improving substantially, then yes that day-to-day value could be improved by better local shops, maybe a closer office building, nicer parks, etc. Generally stuff like that does not happen quickly though, and really big changes like magically teleporting from boring middle of nowhere to a vibrant cultural downtown don't happen at all.