How much do construction costs matter to the price of housing?
Some interesting historical context on construction costs:<p>100 years ago the cost of construction was about $45/sqft when adjusted for inflation and today it is closer to $220/sqft, approximately 5x the cost. Blue collar wedges are pretty similar across time, but the cost of house construction (ignoring land) is dramatically higher.<p>The 1914 sears Model 147 house was 900sqft and cost $872 for materials, estimated at $1,530 with labor.[1] Adjusting for inflation from 1914 to 2020, that is about $22,000 for materials and 40K with labor.<p>Looking at 1913 US national labor statistics, the average baker in 1913 San Francisco worked 54 hrs/wk and made $0.46 per hour for an annual wage of $1,291[2] (or 33K in 2020 dollars)<p>The median baker in 2020 California makes 36.5K/yr [3]. The cost of new housing construction is $220/sqft[4], or 200K for the same size house.<p><a href="http://www.searsarchives.com/homes/images/1908-1914/1913_0147.jpg" rel="nofollow">http://www.searsarchives.com/homes/images/1908-1914/1913_014...</a><p><a href="https://fraser.stlouisfed.org/title/union-scale-wages-hours-labor-3912/union-scale-wages-hours-labor-may-15-1913-476866?start_page=79" rel="nofollow">https://fraser.stlouisfed.org/title/union-scale-wages-hours-...</a><p><a href="https://www.careeronestop.org/Toolkit/Careers/Occupations/occupation-profile.aspx?keyword=Bakers&onetcode=51301100&location=94122" rel="nofollow">https://www.careeronestop.org/Toolkit/Careers/Occupations/oc...</a><p><a href="https://ternercenter.berkeley.edu/wp-content/uploads/pdfs/Hard_Construction_Costs_March_2020.pdf" rel="nofollow">https://ternercenter.berkeley.edu/wp-content/uploads/pdfs/Ha...</a>