The statistic that only 20% of Californians can afford a house with a fixed-rate mortage is misleading because a high percentage of higher-priced houses in California are sold to affluent buyers from other states. I know because I lived in San Diego county for 25 years and many of the home buyers moving in to San Diego county are affluent people from the midwest, the northwest, and the eastern US who are looking for warmer weather and more of an outdoor lifestyle. A lot of real estate in Southern California is sold to affluent retirees from out of state who want a warm climate in their "golden years." The Palm Springs area is full of retired snowbirds from the midwest.
The author makes another odd statement where he says: "If over 20 percent of homes purchased are investor properties, it appears that practically all new housing starts in America are accounted for by speculative buying." Right in mid-sentence the author switches from the term "investor properties" to "speculative buying." Well which is it? Is he trying to say that all real estate investment is speculation. It's not all speculative. It depends where you buy and how much you pay for the properties. As we've seen repeatedly in the last fifty years, people are going to get burned if they buy properties in poor locations and pay too much for them. But I'm not expecting any kind of a slaughter. Our economy depends so much on housing that the Fed cannot raise interest rates more than about another 1 point without causing a recession. So you're not going to see major interest rate increases that will cause a slaughter among housing investors.
There are thousands of house rentals in Phoenix.
>>>I have some friends who just rented a house in Phoenix, AZ and they said there were not that many vacant rentals with 30 miles of Phoenix.