Cost of new construction for single family homes in North America is generally between $100 and $150 per square foot. Houses often sell below replacement cost because supply outstrips demand in areas that are losing population or the style of the house is no longer en vogue or there may be thousands of dollars worth of deferred maintenance.

Inflation, my friend: $12,000 in 1970 == $71,917 in 2013.

And adding more floors to buildings suffers from diminishing returns pretty fast.

See this ebook to understand why skyscrapers are not built (TL;DR: NIMBYism) : http://www.amazon.com/The-Rent-Damn-High-ebook/dp/B0078XGJXO

I don't think a house can be built for $12k. Houses in the rust belt routinely sell below replacement cost because demand is so low.

Right, and a house is a liability as well as an asset: at that sort of price, the main cost of owning the house is the ongoing maintenance, utilities, etc.

In NY state, I think the main cost of the house is going to be property taxes. I don't recall the rates, and don't care to look them up. But I do recall (when the subject has come up) that my sister-in-law in Alden, NY (small town 30 miles east of Buffalo) pays ridiculously high property taxes in comparison to what we pay here in Redmond, WA.

What makes you think a house can be built for $12,000? That's not what the post said at all. It said the house was sold for $12,000 in the 1970s. Depending on exactly when it was sold, that could be the equivalent of almost $70k today.

A trailer house, which is mass produced at high efficiency, costs over $30k. No house that meets US building codes is going to be built for $12,000.

If finishing a small school in Africa (materials only, labor is being volunteered) is estimated at around 25,000$, I can agree about your wonder.

(Sorry for the plug, but it's for a noble cause I think)

http://www.indiegogo.com/projects/ewb-lets-build-a-school-in...

Our building codes and prevailing standards make stuff a lot more expensive, plus it's hard to get labor volunteered for private housing...

Awesome project, though.

Because you'd need lots of upfront capital, you're gambling that the land will still be valuable 2 years later when you've finished and there's probably a local regulation against buildings above a certain height.

Location. It may be possible to build a house for $12000, but land isn't free and the location of the land is part of determining it's price.