I'm a little confused about house prices. A housing lot in the city I'm looking to buy in is 120k to 180 k. So by my logic if I buy a place for 350k then 120K of that is the lot and 230k of it is the house value. Where I start to get messed up is condos and town houses, you own none of the land yet a condo here is usually only 40-50 k cheaper than the house and about half the square footage. It even gets weirder, there is some houses that are considered condos, you don't own the land and you pay a fee each month. These places are usually 330 K only 20K cheaper than a house but you don't get the lot worth 120K - 180K.
I'm confused, once you build on a lot does the value of the lot drastically drop or what am I missing here. Thanks