My parents just got an offer of $555k for their home. They built it in '78 for $45k. Now obviously we're talking over 40yrs, but still nuts. It's only 1990 sq ft, on 2 acres, 3/2 with 2 car garage. Nice granite and stuff, downstairs, but up stairs still outdated.
My home is worth about same, but I got 10ac, whole house remodeled, big shop, stable, outbuildings, animal housing, etc...so like mentioned above, location is key. Their home is like 30 miles outside Seattle, and I'm 50 miles. Same price up closer to city will get you a condo, and not a very nice one.
The big question is when will this bubble blow? I had to ride out the last one because I bought in '07, and by '10 it had dropped 40%. Not a big deal since I didn't sell till 2018. I told the wife we'll stay in this home 7-10 years and get out of WA after the next recovery (hopefully, lol).