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How about designer clothes and name brand things? Cost more for the same thing but it doesn't mean they are objectively better. Same with name brand medicine vs generics.
well these examples aren't great either. for one, many designer clothes ARE better on pure quality than cheaper versions. and people derive pleasure from wearing and showing off brand names - this goes into the price. people value this and will pay more for it. you may think that's dumb, and that's fine.
name brands, vs generics - again, a critical factor here is brand and trust. people will pay more for these things b/c there is a perceived trust in the quality of the goods. now, this is an example of people just being dumb or being dumb shoppers.
so yeah the price doesn't
always determine an objective value for something like consumer goods.
but RE is a sophisticated market, and it's impossible that a US city could remain expensive (which is largely driven by demand to live there and the benefits people gain from living there) year after year after year if it objectively sucked as a place to live.
go look at the list of most expensive US cities. NYC, SF, LA, Miami, Boston, Chicago, Washington DC. these are all places where demand is high for all kinds of reasons. 1 common denominator is that almost are all coastal cities. people like living near the ocean. they aren't expensive b/c the RE fairy waived a wand and made them that way - the market creates prices.