Everyone needs a house; and places to do different things. And real estate is about really creating and providing spaces for people, for activities in an urban setting mostly. The thing is, for most part, there is a lot of matching activities going on. Because people don’t tear down houses when they move, they just sell it to someone else.
It is one of those things that are kind of completely unique (no two locations or houses are the same) so as long as people have strong emotional attachment to specific locations or sense of place, it is difficult for it to be commoditised. Hence the transaction costs involved are really high; and they are often tied to the underlying prices of the assets when they change hands
Another phenomena is that the prices of these assets will change based on the ability-to-pay of the ones buying them. This means that as the overall ability to pay of the economy rises, the prices rise. The value increases without the actual activity of building, searching, selling, incurring that much more costs. How can a society capture and share this value better without all becoming property agents? Henry George’s ideas and perception of land as a property is worth revisiting.
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