Taxmom points out that my old house is for sale in Davis (CA) at $579k.. My then-wife and I bought it in 1969 for $26k, which pencils out to a return of a shade under 10 percent per year--not too shabby once you factor in rental income, implicit or otherwise, and even granting taxes and inflation. Taxmom actually did a walk-through and says she thought it "seriously overpriced," but I'm not so sure: this is (still) a nice enough neighborhood and it seems that any old pile of sticks can fetch an eyebrow-raising return (but Zillow pegs it at $404k).
Still, the question remains: why would anyone pay even $404k for what is, after all, a pile of sticks, and 43-year-old sticks at that? It can't be the vintage Bristol board, so what is it? I suppose I gave a hint of an answer when I said "nice enough neighborhood," but that is question-begging: why do all these undistinguished tract homes prop each other up this way?
I suppose the next guess would be: replacement cost, which would include the notion that you just couldn't rebuild it today with the cheap stuff in the original pile--not and satisfy the market, saying nothing of the building inspector. And permits: as it happens it was the last vacant lot in the neighborhood when we bought it and built on it back in the Pleistocene, and it might well be that this is one of those places for which the best thing the buyer could do is just bulldoze it and start over (So, the real cost is more like 800-900k? Sounds like a stretch).
They're not making any more of them? Well, but they are, kind of: during the nineties and the aughties, new development sprang up around Davis like mushrooms after a spring rain. But they are all farther away from the epicenter, a lot of them are even more charmless and undistinguished and who knows, maybe there is a certain aura...)
...In short, I really don't have the least idea.