I'd have to imagine that part of this calculus is Prop 13 and emmigration patterns.
California's Prop 13 raised property values by by essentially giving homeowners a property subsidy that increases the longer they own their home. Homeowners leaving California and moving to other states effectively get a cash out bonus which increases their ability to purchase in their destination state.
Where do California's tend to move to? Western states[1], of course. This drives up housing costs in other Western states. You can see the california exodus details here and they largely reflect the inflated western housing price trend.
Tech wealth and its hubs on the west coast explains some things. But i think it's racial diversity more than people think. Would you pay 2x for a property if in certain minority groups to avoid racial slights? Many would. That powers demand from large immigration groups in the country which reduces supply, and increases prices etc. (That's how it always is though re: western movement of civilizations etc.)
Land. Restrictive zoning has choked off supply of lots in areas with economic opportunity. Job growth and population growth far exceed new housing supply. Property taxes and school financing really incentivizes local government to approve commercial development (taxes, no students) and slow roll residential construction (add students). Proposition 13 supercharges this dynamic.
Labor. The housing boom that ended in 2007 was an unsustainable bubble. The crash forced many workers to permanently leave the residential construction industry. Stricter immigration enforcement and Baby Boomer retirements decreases labor supply.
Capital. Zero interest rate policy meant the same monthly mortgage payment could be a bid on more expensive houses. Tech workers collect a paycheck from companies that benefited from ZIRP. AirBNB allowed for arbitraging the difference between hotel zoning and residential zoning.
I'd have to imagine that part of this calculus is Prop 13 and emmigration patterns.
California's Prop 13 raised property values by by essentially giving homeowners a property subsidy that increases the longer they own their home. Homeowners leaving California and moving to other states effectively get a cash out bonus which increases their ability to purchase in their destination state.
Where do California's tend to move to? Western states[1], of course. This drives up housing costs in other Western states. You can see the california exodus details here and they largely reflect the inflated western housing price trend.
1. https://dig.abclocal.go.com/ccg/interactives/CA-Moving-Maps/...
Isn't just lack of flat land near major urban areas in the west?
Texas is growing rapidly but doesn't have this issue.
Tech wealth and its hubs on the west coast explains some things. But i think it's racial diversity more than people think. Would you pay 2x for a property if in certain minority groups to avoid racial slights? Many would. That powers demand from large immigration groups in the country which reduces supply, and increases prices etc. (That's how it always is though re: western movement of civilizations etc.)
Land. Restrictive zoning has choked off supply of lots in areas with economic opportunity. Job growth and population growth far exceed new housing supply. Property taxes and school financing really incentivizes local government to approve commercial development (taxes, no students) and slow roll residential construction (add students). Proposition 13 supercharges this dynamic.
Labor. The housing boom that ended in 2007 was an unsustainable bubble. The crash forced many workers to permanently leave the residential construction industry. Stricter immigration enforcement and Baby Boomer retirements decreases labor supply.
Capital. Zero interest rate policy meant the same monthly mortgage payment could be a bid on more expensive houses. Tech workers collect a paycheck from companies that benefited from ZIRP. AirBNB allowed for arbitraging the difference between hotel zoning and residential zoning.
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