Housing is INSANELY expensive in California.
Why?
Everyone wants to move there ’cause of economic opportunity/better climate/chance to rub shoulders with movie stars/blue staters love good shushi?
Mayby those are pieces of the puzzle (at least the first two), but Thomas Sowell has another one.
GET THE STORY.
(Hint: Higher concentration of environmental whackos.)
Author: Jimmy Akin
Jimmy was born in Texas, grew up nominally Protestant, but at age 20 experienced a profound conversion to Christ. Planning on becoming a Protestant seminary professor, he started an intensive study of the Bible. But the more he immersed himself in Scripture the more he found to support the Catholic faith, and in 1992 he entered the Catholic Church. His conversion story, "A Triumph and a Tragedy," is published in Surprised by Truth. Besides being an author, Jimmy is the Senior Apologist at Catholic Answers, a contributing editor to Catholic Answers Magazine, and a weekly guest on "Catholic Answers Live."
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Bingo!
Land is one of the most plentiful resource in the world (water and air being two others), and yet we have managed to create an artificial scarcity of it.
Up here in Santa Barbara, it’s the worst. With no residential development permitted, it’s simply impossible to buy anything — and I’m a software engineer. I love the weather, but I can’t keep renting, and I am frankly going to have to leave really soon.
I’m usually a fan of Thomas Sowell, but while he’s right that environmentalist and the environmental laws in California can be ridiculous, he’s very wrong that it is the cause of the high property cost.
I live in the Sacramento area where there is TONS of new home development in 3 different directions from downtown. Literally thousands if not tens of thousands of new homes are built each year in the area. The housing prices are just as ridiculous in the Sacramento area as the rest of California. In fact, we’ve had higher price growth in the last few years than the Bay Area (where Foster City from the article is). Because the surrounding area of Sacramento is just farm lands, the environmental impact laws don’t slow things down nor cost the builders a fortune. Despite this reality in Sacramento, building more homes hasn’t solved the problem.
I think there are two things driving the California market:
1. Californians don’t seem to care about actual value, just what they can afford monthly, and are willing to get any mortgage that will help them afford a house no matter how ridiculous it is (interest-only ARMS, etc.).
2. People want to be close to where they work, so building more homes on the outskirts, doesn’t change the demand downtown. The high prices in the downtown area then drive up the prices in the outskirts despite the fact that those houses are less desireable (more Californian stupidity).
So while Sowell is right that the environmental laws, particularly environmental impact laws, are ridiculous, I think he is wrong that it is the cause of California housing prices.
Supply and Demand. Open space and other environmental conservation easements have limited the supply of land. San Diego has the same problem. The City and County’s solution was allowing apartment owners to sell off individual units. That did not solve the housing shortage but shifted the problem to renters and poor people who cannot afford to purchase their apartment units.
I agree that it’s Supply and Demand. I live in southern California and own my own home. We paid $99,000 for it fifteen years ago. It was recently appraised at $250,000.
I can’t believe my dinky three bedroom in a so-so neighborhood is worth a quarter of a million dollars. I would never be able to afford buying it now.
No offence to Californian readers, but please quit sending them folks from California up my way to Oregon… We are being invaded
Here in the Seattle area the prices are once again climbing at an incredible rate. I am very concerned that we are seeing a housing bubble that may pop with really bad consequences.
Why don’t you folks come here to Texas? The prices aren’t cheap and are on the rise; but, they’re much more reasonable than the west coast. As Lyle Lovett would say, “…Texas wants you anyway…”
See you at the Alamo, go Spurs.
“No offence to Californian readers, but please quit sending them folks from California up my way to Oregon… We are being invaded”
It’s like ‘The Grapes of Wrath’ in reverse for us. Californians are loving our housing prices so much that they are either moving here (to Oklahoma) in droves or buying up property for rental investments. I welcome them as long as they don’t mess with our laws (we’re pretty conservative around these parts).
So right… it is not just California… whether it is CA or Seattle or Vancouver, BC… housing prices are through the roof and still rising.
Yes, because they can afford it is a big answer also. As the gap between the “haves” and the “have-nots” increases, it is interesting to see the “haves” flaunting their wealth in ways heretofore not seen. Why do they buy houses at such escalating prices? Because they can do.
You are so right Kay Cee. Most of us can’t afford it. It certainly isn’t people in my income bracket that are driving up home prices.
Why not come to Texas? Well, the climate / weather, the lack of forest / mountains, the politics, did I mention the heat? I am just fine here in the moderate climate of the Cascadia area of the Pacific NW of USA / Pacific SW of Canada. Until prices force me to move further inland.
Vato- Texas… yes.. I just may move out to Texas… but are the roaches really a big problem? 🙂
Housing here in the Northeast is outrageous as well. A dinky 2 – 3 bedroom 1 bath house on a postage stamp lot in the middle of nowhere goes for around $200,000. On the other hand, these prices can be taken advantage of. One can sell their place and move to a cheaper state using the equity to pay cash for their new home, and live debt free. A friend of mine is doing just that. Awful tempting…
I live an hour from reno in a tiny (10,000 ish folk and growing rapidly) town. We bought our home last year at a base price of $157,000 (3 bed 2 bath 1500 sq ft). Now the same home in the same area is at $215,000. Holy cow!!!
A friend of mine bought a 750 sq ft(yes, that’s right! 750 sq.ft)bungalow in an ok (not great and not bad) area of West Seattle at beginning of 2002 for $175,000. She sold it at the end of 2004 for $230,000. Utterly amazing.
What about the immigrant/worker import effect? Let me explain. How does a family afford a half-million dollar house in Orange County? By inviting their extended family and THEIR families to come out and share the house with them, with a family to a bedroom, sharing the rest of the house communally? My friend and her husband just bought a house formerly occupied by 3 Middle Eastern families. Kinda makes your head spin.
CaeliDS – yes, our heads spin, for starters.
I just heard some news I wish I hadn’t… I mean… why rub the rest of our faces in it, eh?
2004 saw the addition of 600,000 new millionaires!!!!! that’s right… and as of today, only 8.3 million people worldwide now control 25% of the entire world’s assets.
How long oh Lord?? May your justice fall like the rain!!! Remember your people oh God and have mercy on us all.
Ridiculous House Prices
Listen to John talk about the Mad TV episode where the house prices are ridiculed. With house prices up in the clouds, every potential homeowner should sit down and listen to this episode to let out steam.
Yes . . . I’m tired and can’t come up with …