Why real estate prices go up so much?

That's funny,the middle class won't be able to afford a house.Are you Hillary Clinton?

Speculation. Same thing that drives up the price of oil.

You’re missing the beauty of the free market. When housing prices get to high for the average consumer, they’re destined to fall, as we’re now seeing in markets that had huge gains in recent years.

It's all relative. Prices skyrocketed in Las Vegas, San Diego, etc. and now they're falling like a rock. You look at a place like Detroit, where cars used to be made, and they are in a stand-alone recession while the rest of the country is doing just fine. Houses there are currently selling for less than the value of the boards, bricks, and mortar used to construct the house. Locations that are desirable, not just cities, but locations within cities are the places that realize the most price appreciation based on supply and demand. If you can find a good school district, close to downtown (where all of the jobs are), overlooking a lake, chances are it's going to cost a fortune. Or if you can find a slum with awful schools, drive-by shootings, and a 2.5 hour commute to work, chances are prices are not appreciating and could very well be depreciating. Everything in the middle falls between these two extremes, but it's not like people are getting priced out of owning a home. Perhaps they're getting priced out of neighborhoods as those neighborhoods become more desirable.

Because the cost of oil, inflation, electricity and other elemenst go up, so house prices do the same . Its the high cost of one thing that costs another. Therefire we're charged more. I know, terrible, annoying.

Price drops like in Vegas and San Diego are because there are a larger amount of homes sold to property investors. When the market hits a dip, the investors are the ones who go crazy trying to unload them while saturating the market. Los Angeles does not have as many income property owners. The majority of homeowners in Los Angeles are "Owner Occupied" and therefore, the owners tend to hang on to those properties even in a recession. That is why it is not felt as hard as in areas where there has been alot of properties sold to investors.