Another (often overlooked) point: There IS a housing shortage in SoCal (and in NY and SF, for that matter). The fact that we have high inventory and few sales only tells us that prices are too high, not that we don’t have potential buyers.
Two facts: one, the ratio of population to housing units is much higher in SoCal than in the rest of the US (it’s worst in LA County). And two, the percentage of people who own their homes in SoCal is way below the national average. That tells us that there is a gigantic pool of potential buyers out there. Prices are too high today for most of these people to afford anything. But the presence of an enormous pool of potentail buyers should not be taken lightly. Even if the entire SoCal inventory would sell tomorrow, we’d still need a lot more units to reach the national average on homeownership.
