That’s caused by lack of new housing being built and overzealous zoning (which would actually work to prevent a housing crash), BUT rents were very high in relation to income in 1985 as well.
There is just a heck of a lot of households being formed but no one wants to talk about that.
It started in 1989 when Bush-1 started the unwinding of the defense spending that Reagan started (once the cold war ended).
It hit bottom in about 1994 after the Northridge earthquake (at least in L.A.), took until about 1999 to fully recover.
But IMO we are still early (about 1985) and it may not end the same way (unless we get world peace LOL).
They just started the B-3 in North LA so that will create a lot of good paying jobs (dang it should have bought something in Palmdale).
IMO the current high prices in Housing has a lot more to do with a lack of interest by millennials in the construction trade (or any manual labor trade), and at the same time millennials coming of age to start households. Construction was seem as a good Trade to be in back in the 80’s for the boomers.
IMO it has a lot more to do with the above than anything the Fed ever did etc…
There will be a lot of add on secondary jobs created.
But 6K well paying Jobs added to LA already good Jobs (and don’t believe everything your read, LA has a lot of wealthy people with great Jobs or careers).
What ever new home building is still only about half the normal pace for the last 30 or so years and we are in the middle of a household formation boom.
The areas that have risen quickly over the past 4 years are not the kind of areas that were within reach of millennial twitter-twits to begin with. Activity was more driven by investors, Wall St, and tech money, depending on area.
The areas and cities within reach haven’t risen as quickly. Also, if you think that free Fed money doesn’t have a part in it, think how millennials will afford homes in already poorly affordable markets at higher rates. Something has to give.
eventually they will start to build in mass (if and when unrealistic zoning rules start to fall in CA).
They will get greedy and over build, but until that time it’s going to be tough if you want to live in SoCal and or the bay area so it will be awhile IMO.
Have fun guys. Arguing for the sake of arguing over something no one really knows what the magnitude of the pullback might be is just a big time waste that doesn’t put any more money into my wallet.
