SD home prices are up 27% from 2 years ago. They’re up 60% from 5 years ago. In addition to the appreciation, you also get back your down payment and all the principal you put it. Minus commission, but still: a giant pile of money.
Regarding your other points: the question you asked was, why would you sell? The answer is that if you sell, you get a giant pile of liquid money, which is valuable (especially if you’ve lost your job).
Whether this is the right choice for you or anyone completely depends on the situation; I was just rejecting your premise that there is no reason to sell. There’s a very good one, that may in some cases offset the issues you raised.
(BTW your inflation math is flawed… eg it assumes no return on the pile of money, and also fails to account for all the cash going out the door if you own.)
