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That’s because in most cases, you’re paying for the cost of the land, not the house itself. Just look at how much unimproved land costs. The house itself is a depreciating asset, the land appreciates so much that it overwhelms the cost of the house. Even condos are subject to this, simply because they take up space (which is worth money) and their price is tied to traditional houses because they are (imperfect) substitutes.
No. Appraisals and tax assessments have a land value and a “structural improvement” values. Both of these are added together for the purchase price.
If there’s a building on the land that’s not derelict and has utilities- it’s almost always going to be worth more than the land value by itself.
There are def certain zip codes and/or a very large plot of land with a single house on it where the inverse is the case (land being worth more than improvement) but that is not the norm.
My entire city burned down a year and a half ago. The burned lots were selling for over half the price as surviving houses, right after the fire. Like they were only 20-30% off. Most of the value is in the land.