The soaring valuations of land and real estate largely reflect inflation rather than intrinsic or productive value. Over decades, the value of currency has eroded due to inflation driven by fiat currency creation. This effect artificially inflates the nominal prices of assets like real estate, creating the illusion that they’re “worth” millions. In reality, these values are largely inflated representations of currency devaluation.

For instance, a house priced at $50,000 in the 1970s could now be valued at over a million dollars, not because of any radical increase in the house’s utility or the land’s productive potential, but because the dollar’s purchasing power has plummeted. This disparity grows more apparent when you consider that the average wage has not kept pace with real estate inflation, placing property ownership out of reach for many people today compared to previous generations.

Furthermore, central banks have incentivized real estate investment as a store of value against inflation, pushing prices higher. Low interest rates and mortgage availability create an environment where high-priced assets are financially accessible, further distorting values. In essence, what’s really changed is the value of the dollar itself, not the underlying value of real estate. This process demonstrates how inflation and fiat currency devaluation make it increasingly difficult for new generations to build wealth compared to those who bought property before major inflationary waves.