Bearishgirl, I am with you all the way on Prop 13. The SD/Charlotte example was just to illustrate a point, that measures of life style, geography, weather etc alone don’t determine home values. RE is the biggest industry in CA. If memory serves me, it is a whopping 17% of GDP. The mortgage/Wall Street fusion was purportedly born in Orange County. CA has one of the largest foreclosure rates in the country. I don’t think this is all coincidence, or that people are simply “prepared” to pay higher home prices. Life-style is sold here big time, and some might argue largely on the back of Hollywood glitz and glamor, so one is “stuck” with the high prices.