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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (43634)	10/25/2005 12:53:19 PM
From: mishedlo	Read Replies (2) \| Respond to of 306849

I do not care what the population growth is in California. Prices simply can not forever rise above people's ability to afford them. It just is not economically possible over the long haul. That they have in this bubble does not mean the fundamentals are stong either. The fundamentals in fact could hardly be worse. Prices will fall because demand will fall because of increasing bankruptcies or because selling will increase supply, people will decide to cash out, or the demand to live in California will simply go away. The situation is unstable and obviously in a bubble. Only rising wages can cure the problem but house prices are so far above wages that prices would have to remain where they are for 15 years or so just to get back to the trendline. Not gonna happen. Mish

To: GraceZ who wrote (43634)	10/25/2005 11:31:42 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 306849

Housing production has not kept pace with the State’s housing needs, particularly in the coastal metropolitan areas After prop 13, the cities have decided that trying to get tax revenue from residential construction is fruitless so they only approve commercial construction properties. It is readily apparent when you visit Silicon Valley- San Mateo for example which 30 years ago had a lot of salt mines and "Marine World", has turned into one giant office park with very little residential construction post - 1980. Go one city north to San Bruno, which is an older city built out 50 years ago, and there is a lot more residential. The tax code has caused a lot of the housing shortage, is my point. Local governments view residential construction as a bunch of freeloaders who use city services and don't pay for them (which is true, unfortunately)

To: GraceZ who wrote (43634)	10/26/2005 1:48:18 AM
From: Live2Sail	Read Replies (2) \| Respond to of 306849

"Take some time to investigate. How does an increase in sales of existing homes help to alleviate a persistent gap in housing unit construction?" Grace, What does the above have to do with the fact that Prop. 13 gives people an incentive to stay put. Also, your statistic of 6.5% turnover in CA versus 5% for the entire country means little to nothing about the effect of Prop. 13 as a "Tax on moving." You have an observational statistic with confounding variables. It's a weak correlation at best, and correlation is not causality. See these papers that describe the "Lock-in" effect and the incentive to stay put because of Prop. 13: scholar.google.com scholar.google.com scholar.google.com Just because something is conventional wisdom doesn't necesarily mean it's wrong.