It's mostly illegal to build a cheap home because they can be deathtraps. I believe house fires used to be one of the top killers in the country; today, firefighters only spend 1% of their time fighting fires.
In any case, property prices in high CoL locations is mainly the cost of the land. I've visited homes in the midwest nicer than almost anything I ever saw in the Bay Area that cost 200-300k.
This is exactly it. I rent a house that costs $900,000 and it’s a 60 year old death trap. Just like most of the other houses in the neighborhood. It was built when LA County was more of a “build baby build!” Place lol.
When you buy a house here it’s more like you’re buying a $900,000 piece of land and getting a free house in the deal. Those houses are practically worthless and a lot of new buyers tear them down and build a new one.
I’d guess that doing that costs a few hundred thousand. But most of the time I see that, the new houses are way better quality. If you wanted to bare minimum meet code, it’d probably still be cheaper to build a new house than to refit the old one.
Cheap can be achieved by taking a lot with a single family home and putting 8 apartments on it too. Though habitat for humanity houses are sub-100k and hardly death traps.
And land you can build on is expensive because it's scarce, because people vote to make building anything illegal (except places that are already in decline and need residents)
My house is a death trap, for that matter, but it's thatched..
In any case, property prices in high CoL locations is mainly the cost of the land. I've visited homes in the midwest nicer than almost anything I ever saw in the Bay Area that cost 200-300k.