> It never makes economic sense to tear down a house if you're paying for it (above the land value).
The land value is the key. Often, houses in the 50s-80s were built in what was suburbs or actual small villages back then, with enormous land surrounding them because land was cheap. Nowadays, the urban areas have grown and grown, and with them the desire for space for people to live on - even here in Europe, in Munich for example, land values exploded over the last 20-30 years. Think of like the land price not only doubling or tripling, but increasing tenfold or more since the houses were built.
Say you have land with a house that was worth 50.000 $ when it was constructed... and now, the land alone can be worth millions. So you tear down the existing house that's in the middle of the plot, build four new houses on it, each one bigger than the old one, and sell three of the four houses to pay for your new home and a nice chunk of cash. Or you rent the houses out for absurd amounts of money and never have to work a day in your life again.
And that happens not just with houses 50 years or older. Here in Munich, I've seen this happen with houses younger than me, simply because land values went up so immensely.