4 ms·

If "2½ home sellers left California for every out-of-state buyer coming into the state", that just means there's a huge pent-up demand of local buyers waiting t

If "2½ home sellers left California for every out-of-state buyer coming into the state", that just means there's a huge pent-up demand of local buyers waiting to buy properties, out-bidding out-of-state buyers hoping to move to the area, right? I'm not sure how else to interpret that. I feel like it says more about the buyers than the sellers.

jacquesm 10y ago
You're not accounting for foreign buyers that may never actually come into the state at all.
- muzz 10y ago
  And for the larger number of immigrants that move into California and buy houses
laughfactory 10y ago
Yeah, pretty much however you interpret it, it's not a good thing. We live in San Diego, and prices here have been going through the roof...far beyond the intrinsic value of a property. I don't have any data on the topic, but it seems to be "investors"--both foreign and domestic purchasing lots of homes, often in cash. In my opinion they're creating their own little (or big) bubble. After all, the price is only appreciating because you have enormous entities purchasing real estate as fast as they can get their hands on it. Hopefully, once things get too hot prices will implode and normal people will be able to afford to buy a home again.
- Decade 10y ago
  That would be nice, but I don’t see how it would end well. Their value is based on the intrinsic scarcity of homes in desirable locations. For existing land owners, either they sell out to developers and allow the land to realize its economic value, or they keep the land the same and eventually the bubble subsides. For various reasons, they tend to fight to keep the existing neighborhood character, which restricts the growth of the economy. So, when the bubble collapses, the homes will be worth less. This will suck for people who bought a $40,000 home, that went up to $1,000,000 and then back down to something still more than $40,000. It will suck a lot for people who bought it at $1,000,000 and will lose all their home equity. I think the proper solution would be to evolve the neighborhood over time, as the economy changes. The problem with that is you would have to start 60 years ago. As it is, we have small areas of market activity, and large areas of externally ossified neighborhoods that are internally gentrifying because the stuff on top of the land is not allowed to adapt to the economy.

jacquesm 10y ago

You're not accounting for foreign buyers that may never actually come into the state at all.

muzz 10y ago
And for the larger number of immigrants that move into California and buy houses

laughfactory 10y ago

Yeah, pretty much however you interpret it, it's not a good thing. We live in San Diego, and prices here have been going through the roof...far beyond the intrinsic value of a property. I don't have any data on the topic, but it seems to be "investors"--both foreign and domestic purchasing lots of homes, often in cash. In my opinion they're creating their own little (or big) bubble. After all, the price is only appreciating because you have enormous entities purchasing real estate as fast as they can get their hands on it. Hopefully, once things get too hot prices will implode and normal people will be able to afford to buy a home again.

Decade 10y ago
That would be nice, but I don’t see how it would end well. Their value is based on the intrinsic scarcity of homes in desirable locations. For existing land owners, either they sell out to developers and allow the land to realize its economic value, or they keep the land the same and eventually the bubble subsides. For various reasons, they tend to fight to keep the existing neighborhood character, which restricts the growth of the economy. So, when the bubble collapses, the homes will be worth less. This will suck for people who bought a $40,000 home, that went up to $1,000,000 and then back down to something still more than $40,000. It will suck a lot for people who bought it at $1,000,000 and will lose all their home equity. I think the proper solution would be to evolve the neighborhood over time, as the economy changes. The problem with that is you would have to start 60 years ago. As it is, we have small areas of market activity, and large areas of externally ossified neighborhoods that are internally gentrifying because the stuff on top of the land is not allowed to adapt to the economy.