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Because at least 52% of California land is owned by state and federal governments, and they don't let people live on it. Less land available to build, higher home prices. Areas with the highest prices have greenbelts, scenic viewsheds and land trusts that drive up the price of buildable land.

Every development that gets built in almost every California city has to have so many low income houses as well. This drives up the price for the poor sods paying retail. In Salinas, CA, the city council is about to pass a law that for every development ok'd by the planning department %40 of the houses have to be low income. That is a whopping percentage don't you think?

The socialists running the government in Santa Cruz County CA have come up with a devious way to raise the cost of housing. For individual builders, if you want to build a new home you have to upgrade the plumbing(install low flow toilets, showerheads) in enough of your NEIGHBORs houses so there is zero impact of your home on the water system. How many houses is that? For one builder, it was five homes. He had to pay for their plumbing upgrades. It added $7000 to the cost of his home.

Why is the housing prices still so high in California? It boggles the mind.

I wonder the same also. In my part of CT housing is thru the roof (not quite as bad as in this article, but still ridiculous). I think it has to do with the extremely low interest rates. I don't see how the high prices can be justified forever though, since I've also been seeing many former white-collar professionals taking jobs at temp agencies and WalMart. For the time being I think a lot of what's driving the high prices is that all of those who got out of stocks w/o losing their shirts are putting that money into real estate. Eventually this demand has to decline, and interest rates have to creep up (with deflation fears) so we may see a shakout in real estate. Just one man's opinion.