Slim
Yes, I am hedged for inflation so I benefit if real estate continues to rise.
Are you unhedged - so you lose if it rises? Does that disqualify your perspective?
"Citing affordability is not an argument we usually hear these days." This is something the Fed and others track. Sorry if you are ignorant.
Affordabilty is not the average home price divided by median income. Its the monthly home cost divided by monthly income of home owners. Lower interest rates and rising incomes have been favorable to affordability. Home prices have risen and affordability is starting to decline, but from the perspective of a home buyer they want bigger, newer, better located homes, and they can afford to pay more, so its likely home prices will continue to increase. During the 70s, home prices increased due to inflation without regard to affordability - prices can go a lot higher than you think.
As for running out of land, perhaps not everywhere, but we are running out of land in NYC, South Florida, San Fran, L.A., DC., anywhere that real estate is expensive. Some people can work remote, and those folks are picking up and moving to less expensive areas. I just did that myself.
The real constraint is not land. Its homes. There is a relatively fixed supply of homes. The cost to build has averaged around $150 per square foot, depending on finish level, but if you have read the news then you know supply chains are all screwed up. A sheet of 4 by 8 OSB used to cost less than $10 bucks is now $60 if you can get. Builders can't finish, let alone starte new jobs, because they are short on materials. They are also short on workers. Hopefully this is temporary but minimum wage jobs around me for teenagers with no experience have zoomed from $8-9 hour last summer to $12-15. Imagine what it costs to get a guy to show up to frame your house if you can even get enough lumber delivered?
There are also precious few homes located close to jobs and other amenities.
Maybe someday everyone will move off grid, get starlink internet, solar energy and collect rainwater. A few pioneers are doing this now. But most people are not. Most people want to live close to jobs, stores, cell coverage, electricity, water and sewer systems. Buying land without access to a sewer system and trying to get a permit for a septic tank is literally a crap shoot. That is why the middle of the country is mostly empty - lack of access to those things.
Lets have a little intellectual bet. I'll bet you that nominal home prices are higher in 1 year, 3 years, 5 years, and 10 years from now. I'm not infalliable, but I think those things are very likely if only for the fact of the spending coming out of Washington DC these days.