And the housing shortage is entirely man-made. There’s no shortage of labor, or land, or wood. But no one seems intent on solving it.
This demonization of developers is like cutting off your nose to spite your face. We need more housing, and yet, the city and its residents vilify, tax, and restrict the group of people that can provide it. And the affordability crisis continues…
One last thing pumping up housing prices: inflation. It appears it’s here to stay, and housing prices tend to track inflation. In the mid-to-late 70s, the last inflationary period, California home prices tripled.
So yes, houses will never be as cheap as they are today. You can say that on January 1st of each year and be correct 90% of the time.
Back to the cartoon above. Will there be a housing price correction?
We get asked this question a lot. We used to say that “absent some act of God” housing prices will continue to rise. And here we are, having just experienced a horrific act of God with the recent LA fires (not to mention COVID, strikes, rising rates)…prices haven't budged. Fundamentally, the housing shortage wins.