You made a mistake in your calculation because you ignored leverage. Most people buy a house using some combination of equity and debt (usually 20% / 80%).

You need to calculate the return based on the equity invested. Assuming they paid 20% down that's $125K. The house appreciated $773K over the initial purchase price. That's a 6x return on equity, not a 2x.

But thanks for the lecture about how other people don't understand inflation / math.