It never makes economic sense to tear down a house if you're paying for it (above the land value). It depends on building codes in your area and such but my house is nearly 40 and it's not even close to end of life. Hell, the house I grew up in is still there and it's gotta be approaching 80.
The land value is the key. Often, houses in the 50s-80s were built in what was suburbs or actual small villages back then, with enormous land surrounding them because land was cheap. Nowadays, the urban areas have grown and grown, and with them the desire for space for people to live on - even here in Europe, in Munich for example, land values exploded over the last 20-30 years. Think of like the land price not only doubling or tripling, but increasing tenfold or more since the houses were built.
Say you have land with a house that was worth 50.000 $ when it was constructed... and now, the land alone can be worth millions. So you tear down the existing house that's in the middle of the plot, build four new houses on it, each one bigger than the old one, and sell three of the four houses to pay for your new home and a nice chunk of cash. Or you rent the houses out for absurd amounts of money and never have to work a day in your life again.
And that happens not just with houses 50 years or older. Here in Munich, I've seen this happen with houses younger than me, simply because land values went up so immensely.
Munich is fucking expensive, I'm actually looking towards moving away entirely and save up to buy something when prices ever become reasonable. Forget about saving anything while living here - Munich drives away those who have been born here all the time.
[1] https://www.sueddeutsche.de/muenchen/muenchner-milliardenspi...
[2] https://www.sueddeutsche.de/muenchen/muenchen-grundstueckspr...
Wood doesn't get any weaker with age. Assuming no water damage, 200 year old timber houses are just as durable now as when they were built. In fact 200 year old timber houses in America are more durable than anything you can build now because the quality of wood 200 years ago, even 100 years ago, is better than what you can get now, and the quality of wood 100 years ago in America is better than anything Europe has had for multiple hundreds of years!
Also drywall is a nice material for many reasons. Need a new wall? One day of work. Want to remove a wall? If there isn't a support beam, not an issue. American houses can be reconfigured as the needs of family and society change. My 1950s house has had walls removed and added throughout its life and owners, which is why it has an up to date flow despite what was a very constricted original floor plan.
Also dry wall is easy to fix and paint.
Water is an issue, yes. That part sucks.
Finally, in regards to natural disasters, wood construction can withstand earthquakes far better than stone construction!
Most common major structural work with stick built houses is jacking them up and replacing the foundation. That's because the concrete or masonry foundation has deteriorated but the wood framing is in good condition.
In my neighborhood (admittedly, originally built in the 50s) every single sale I can remember from the last 15 years has resulted it a complete teardown and rebuild bigger. And one of those rebuilds recently changed hands and is undergoing extensive remodeling for over a year now.