DWCAP, your last sentence really said it all. Prices are really just the result of supply and demand. Rich foreigners could scoop up a bundle of CA houses, but then they either have to rent them or sell them, to……Californians! They either supply them to the rental market, thus lowering rents, or supply them to the for sale market, thus not changing supply in the long run.
Neither move looks financially feasible, so the rumor of big foreign money moving in is probably a new urban myth.
