Posted on 02/01/2025 9:32:59 PM PST by SeekAndFind
Everything seems to be more expensive in California - even the politicians. But housing is getting to be - nay, scratch that - has been a real problem for some time. Young families are surrendering their dreams of owning a spacious California house in the suburbs as Mike and Carol Brady did, and that's because housing has grown prohibitively expensive in California - and in plenty of other places, too. For the moment, though, California makes a good cautionary tale.
The Petersen family’s two-bedroom apartment in northern California is starting to feel small.
Four-year-old Jerrik’s toy monster trucks are everywhere in the 1,100-square-foot unit in Campbell, just outside of San Jose. And it’s only a matter of time before 9-month-old Carolynn starts amassing more toys, adding to the disarray, says her mother, Jenn Petersen.
The 42-year-old chiropractor had hoped she and her husband, Steve, a 39-year-old dental hygienist, would have bought a house by now. But when they can afford a bigger place, it will have to be another rental. Petersen has done the math: With mortgage rates and home prices stubbornly high, there’s no way the couple, who make about $270,000 a year and pay about $2,500 in monthly rent, can afford a home anywhere in their area.
Describing home prices in California, especially in places like Campbell - a stone's throw from Silicon Valley - as "stubbornly high" is to indulge in the greatest understatement since the English King Harold Godwinson described the Norman invasion as "a bit of a bother." Prices in the Bay Area, of which Campbell is broadly a part, have been sky-high for some time now. Interest rates are climbing, too, although before young people get too agitated, I would caution them to look at the interest rates of the Carter years.
Supply and demand, as always, apply here. But while this piece recognizes the lack of supply of housing, what they don't do is ask why.
The biggest driver of this trend, experts said, is simple: There are far too few houses on the market to match pent-up demand, driving prices past the point of affordability for many people who are relatively early in their careers. Coupled with high mortgage rates, many have concluded that renting is their only option.
“Wage growth hasn’t kept up with the increase in home prices and interest rates,” said Domonic Purviance, who studies housing at the Atlanta Fed. “Even though people are making more money, home prices are increasing at a faster rate.”
Oh, sure, there's one "why" there. There are far too few houses, sure. But why are there too few houses?
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I spent many years conducting root cause analyses and teaching major corporate employees, mostly engineers, how to do root cause analysis. One of the tools for root cause analysis is what some call "5 Whys," but I always called a "Why-Why Analysis," as sometimes it may take two "Whys" and others, ten. In this case, there are too few houses. But they don't ask or answer the next question: Why?
This is going to take us down a long road, involving onerous building codes, landscaping regulations, zoning issues, and much more, but most of these rules, regulations, restrictions, and requirements were put in place by state and local governments that are, in this part of California, overwhelmingly Democrats, who never saw a rule or regulation that didn't make them dance a buck and wing.
When asked, "How do you know when you've arrived at a root cause," my stock reply was, "When you arrive at the point where some person or group of people made a decision, that's likely to be your root cause." People who decided to vote in California's overwhelmingly Democratic state legislature and the big coastal cities' overwhelmingly Democratic municipal governments would seem to be the root cause here. Oh, the linked article also mentions another city - Boston - and we could say the same things there. Or in the Denver area, where two of our kids live - and can't afford a house, even with a three-income household. Real estate is cheaper in other places, like small towns scattered across flyover country, but that's not an option for everyone, and there are good reasons why some people can't or don't want to move.
Fortunately, there's an answer. Vote in politicians who vow to deregulate, remove roadblocks for developers, establish only minimal structural standards for safety (this is earthquake country, after all), and then get out of the way and let developers do their thing. Supply and demand. Raise the supply to meet the demand, and the prices will moderate.
The American Dream will be real again. Mike and Carol Brady would smile at the thought.
Marxist, communists and socialists don’t need homes. They can sleep in their vans.
Day going bye bye.
Let them practice what they preach!
Who did they vote for?
As a quality engineer, I sometimes explained to non-engineers that my job often basically involved me acting like a toddler. You know, at the stage where they follow someone around asking "Why?" over and over again to every response. :-)
and at that income and rent they should be able to save like 100k a year...
If one does “5 why’s” on house prices but doesn’t hit on immigration as part of it, then like the author of this article, they are part of the problem.
What about that BLM co founder a 40? yr old black woman who blames everything bad on whites. She has “somehow” managed to buy at least three different homes since the George Floyd riots of 2020. And what do you know? Her biggest home is in a gated neighborhood full of white and asian residents.
They are not part of the problem when someone fools others to believe a 750 square foot house, built in 1955, in the middle of the California desert, is worth 350,000.00. It is criminal.
What is he doing to make the money?
LOL. Per the article, the lad is four years old. Cut him some slack.
I get your point that perhaps their toy budget is a waste of money, but I looked at Target’s website and toy monster trucks are in the $4 to $30 range. Even if the tyke has $1,000 worth of such toys, it’s not as if that would have been enough to make any kind of dent in their housing situation in Santa Clara county (median home price $1,500,000). So let the boy have his damned trucks, lol
Bingo!
That's backwards. How can wages possibly keep up with housing prices that are kept artificially high?
Just for fun, I looked up the modest house that I grew up in, in Sonoma County, CA. Modest... 3 bedrooms, 1 bath, small kitchen, living/dining room, 2112 square feet. My stepdad built it in 1957. Its estimated worth is around $1 million. Which is ridiculous. My bigger and newer house in Texas is "only" worth about $330K.
Sadly, what is lacking among so many Californians is a basic understanding of supply and demand. They vote for policies that prevent construction of new housing at the same time they vote for policies that try to force builders to build "affordable" housing. So, what do they actually want?
It's a sad situation. I would love to go back to California, but the CA of today is not the CA where I grew up.
I laugh out loud every time I see one of these commercials promoting apps that tell you that you are paying for subscriptions that you did not know you had.
Who raises a kid that needs an app to tell him he is paying for stuff he didn’t realize he was paying for?
As a seventy-something I review transactions made on my bank card every time I log into to my bank account and there are never any surprises.
How hard is that?
I grew up in So.CA, Lived in the Seattle area for 20 some years , and now live in Hawaii( for the last 25 years)
I understand expensive real estate!
The problem is not “forced” affordable housing,
it is government. They won’t allow use
of open land.
Government run by mostly Democrats.
They want everyone to live in Prison like conditions.
as opposed to letting us be free,
I don’t want to wait for bus to go to the store I want to go there when I want to go there!
even if the store is 3 miles away.
As an adult in CA I did 140 miles per day just for work.
In WA State I did about 60,000 miles per year work and recreational commuting in MY car!. In Hawaii my wife and I
do about 15,000 miles per year as we can’t stand waiting for a broken bus.
What is my point? I lived in areas, I could afford, they all required a long commute.
Democrats want a 15 minute walk or bike ride to where
you shop, work, go to school, or recreate in the politically
correct way.
Give people options, they are very innovative,
Democrats are NOT!
I’ll stick to my 5 Acres, with animals, fruit trees and a real garden and a drive to the store over an Apartment and taking a bus any day.
I routinely conduct searches in the California Digital Newspaper Collection, and have, of course, out of curiosity, checked up on the evolution of real estate prices in my old neighborhood (likewise in Sonoma Cty.). Homes that were built and marketed in my upscale neighborhood in the late-1950s for $24,900 had "skyrocketed" to $39,500 by the mid-1960s (when we moved there). By the mid-1980s, the price range had shifted to $350,000 - $400,000.
True, a lot of that was due simply to appreciation in value of the land (the nearby area had become "built-up"). But the remainder?
Regards,
move
Bingo!
Did they tell you who they voted for? No? Then you have no idea.
Perhaps Trump can help with “supply and demand” by lowering demand, by deporting a few million illegals. And also by eliminating housing vouchers for welfare families in high-cost areas, and make them MOVE to low-cost areas.
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