The last few comments strike notes that bear some discussion. I agree that, on the surface, public employee unions in CA, and the increasing dominance of a left-leaning Democrat party have brought us to the brink of financial ruin. But C’mon, unions just do what unions do–increase their pay, benefits, and power…what I would do if I were (still) in a union. And left-leaning politicians have always been around, nothing new there. What goes unremarked is why these two forces gained such ground in recent decades. Why did officeholders cave in so disastously to union demands? Why did the media shift to be a mouthpiece for the left? How did politicians give up on conservative values?
We can all offer answers to these trends. Instead, I’d like to take these trends as a given, and reflect on their impact on real estate in CA. In a word, we are pretty much doomed in terms of average real estate values, since they depend on underlying economic health and demographic trends.
The glory days of RE appreciation in CA were all in years when government here was small and efficient, when middle class, educated people moved into, not out of CA, and when businesses were not saddled by governmental, environmental, and lawyer-inspired burdens as they are now. I’m referring to decades ago, not so much the 2000 – 2005 credit-inspired blowoff. Few would believe it, but average CA house prices about matched the national average in 1975. We were a solidly conservative state with a clean government, good infrastructure, and an entrepreneurial spirit.
Since then, we have emulated the high tax, big government policies of states like New York, Michigan, Massachusetts & others that have seen their people and businesses flee to other states or other shores. Accordingly, I’d seek states and cities for RE investment or house purchase that have the welcome mat out for business, that have more reasonable taxes and cleaner politics, and have an influx of productive citizens. Long-run demographic trends always dominate RE values, and we should place them first in our criteria for where we place our money.
