Before modern development regulations, the infrastructure costs of greenfield development such as roads, schools, parks, and emergency services could be passed on existing residents. There were few or no environmental regulations to deal with either.

As these costs are tied to entitlement upfront development costs rise, and thus the development of higher market segment products makes more economic sense - one feature of real-estate development is that it takes about the same amount of time money and effort to do a small budget project as a large budget one.

To see how far consumer expectations have changed imagine the 800 square foot Levittown floor plans being marketed for growing families today. http://tigger.uic.edu/~pbhales/Levittown/building.html

Of course the other piece of the puzzle is that housing in the US has been disrupted several times over the past 150 years, from balloon framing with dimensional lumber (factory production), the development of the mobile home (again, factory production), to modern large subdivision development such as the aforementioned Levittown (economies of scale using mobile production crews performing repetitive work).

The problem with robotic production is that the capital investment is high, the demand for the product cyclical, and the end product is not transportable in an assembled state (except for mobile or modular housing).

House prices are also a hot political issue; namely, each generation wants future generations to pay excessively for their houses when they retire, so they support the gov't borrowing heavily to fuel house prices. (Of course they want future generations to pay for the gov't debt too.)

Improved robotics, materials and whatnot will have limited effect on house prices. A lot of the savings would be absorbed as greater profit for construction and renovation. You see this happening in the pre-fab industry. For the next decade at least, nothing beats buying an existing house, financially. Most houses in the US are selling for less than replacement cost.

That's easy to answer -- housing is expensive because in an open market, prices rise in response to demand. More demand, higher price. Less demand, lower price.

> Do you think in the near future with improved robotics, materials, building methods that an average size home might cost $25000 instead of $250000?

Possible but not likely. The cost of a house includes the cost of the land the house sits on, and persistent rumors have it that they're not making any more land.

To see the sense of this, compare the cost of a house, with land, versus a similarly equipped mobile home, with wheels. The mobile home costs less because it has no land to call its own.

It doesn't have to be. I live in a large city and all of these new apartment constructions are popping up.

The thing about new apartment constructions is that they come with gyms,parking spaces, roof top decks w/ bbq grills,movie theaters,etc. All things that I and many others don't need.Yet my option is pay for it or pay half and move into a 100yr old building with "vintage old world charm".

It would be nice to see a trend of new modern buildings with out the frills so people have some place affordable.

Those with $1MM+ houses, however, oppose this for obvious reasons.

You can provide you own protection, so you don't need the police (I'm actually half-serious on that), and firefighting is just a scam. Why, I bet that you could find an insurance company that would insure your house without it being protected by a fire district. Heck, you don't need homeowners insurance at all! Just buy your cheap house outright, and there's no need!

And zoning laws? Who needs them! People can live just as comfortably downwind of a sewage treatment plant or an oil refinery as they can by a lake! It's a scam, front to back!

And to answer the poster's original question, why is housing so expensive, read Adam Smith's "The Wealth of Nations." Even if you just pick it apart, and read the chapters you want, it's a fascinating description of .. well, the wealth of nations. Rents are part of that equation, and he covers it.

But education might become less dependent on geography(by using remote ed tech) or in some scenarios(better AI) much less important, which will indirectly reduce housing costs.

Another option is a growing availability of remote jobs and better remote social lives( remote telepresence and video conferencing, access to great and varied food through sous-vide, generally better digital experiences) might also decrease the demand for city life.

It's interesting that people who are in the business of selling houses and lots will tell buyers that they are selling a place "in a good school district" even in states like Minnesota, where there is statewide public school open enrollment, so that anyone can live anywhere in the state and send their children to schools anywhere in the state.

http://education.state.mn.us/MDE/StuSuc/EnrollChoice/index.h...

In my public school district, which aggressively seeks open-enrollment students, there are students enrolled with residence addresses in the territories of FORTY-ONE other public school districts. We happen to be homeschoolers who live in this school district for other reasons, but it amazes me how many families think they have to live in this school district to have their children in the schools here, when the law has been otherwise in Minnesota for more than twenty years now.

Agreed that decoupling work choices from residence address constraints will help change the market for housing. Having public school open enrollment in all states, with public school funding rules more like Minnesota's

http://www.house.leg.state.mn.us/hrd/pubs/mnschfin.pdf

might also help rationalize the housing market, but the example here shows that will be a slow process as families readjust their habits in shopping for housing.

One hundred years ago, industry located near natural resources or methods of transport. Large rivers, the Great Lakes, natural seaports, etc. were of huge practical importance, and most industries needed to be relatively close to related industries. So, for example, you saw lots of factories which made car parts in the general vicinity of Detroit.

A website, however, even a huge one like Google, you can make anywhere. And since access to natural resources is no longer really an issue, what's left? Access to people.

We know that's not the case. Materials possessions and keeping up with the neighbours does not make people happy. That reality needs to be more widely accepted for a true disruption in the housing market.

My .02.

The less you own, and the less reliant you are on others and material possessions, the more at peace and happier you will be.

I can't quit my job because of the rent. If I were an owner, I'd be able to quit. So, I exchanged one freedom for the other.

The improved materials already reduce the house building costs compared to 10-20 years ago but this mostly applies for rural areas....

this is exactly the problem for housing prices: supply can't increase while more and more people want to live there(world population keeps growing and migration is at peak levels)

opposed to that there are countries, cities or neighbourhoods where you can buy property cheaper than the price of building it

http://www.youtube.com/watch?v=JdbJP8Gxqog&feature=playe...!