Barnaby: CA’s problems are theoretically fixable, yes. But given recent trends, that is a bet I would pass on.
The two (at least) important long term fundamentals affecting real estate are demographic and political/economic. That CA is driving away its most productive, entrepreneurial, tax-paying middle and upper-income people is well documented. Its overly generous government programs are attracting the tax-users, whether on the dole or the unionized government work force. The current fiscal crisis is showing more of the same–an inability to fundamentally curb wild overspending. Instead we’ll have angry politicians getting revenge on voters by cutting the most visible programs in the most painful ways their creative minds can come up with.
While there will always be some pockets of investment opportunity in such a diverse state, I’d rather place my long-term bets on a state like Utah, Texas, AZ, in a growing and dynamic city welcoming CA businesses and well-educated, taxpaying citizens.
