I never said that all or even most of the change in price is simply a function of changes in housing stock. I simply stated that changes in housing stock is something you must account for.
Also, your example of your grandparent's home is long tail. Some places have seen skyrocketing prices that have everything to do with the location (and zoning restrictions limiting stock of housing in area). Example would be Santa Monica. Lots of coastal towns in California. But median, not mean. Think about all the one-room shacks that used to exist. You don't see them anymore because ... why would someone keep them around now? The homes that survive are the ones that retained enough value to make it worthwhile to keep up/restore.
Here in southwest Virginia, an empty lot near town might be about $40k. A house built on that will have multiples of that value.
Also, your example of your grandparent's home is long tail. Some places have seen skyrocketing prices that have everything to do with the location (and zoning restrictions limiting stock of housing in area). Example would be Santa Monica. Lots of coastal towns in California. But median, not mean. Think about all the one-room shacks that used to exist. You don't see them anymore because ... why would someone keep them around now? The homes that survive are the ones that retained enough value to make it worthwhile to keep up/restore.
Here in southwest Virginia, an empty lot near town might be about $40k. A house built on that will have multiples of that value.