Fear and Hope for the Future of California's Housing Market
"Realtors have an interesting dilemma ahead of them, said Leslie Appleton-Young, chief economist for the California Association of Realtors (CAR); at the same time that they will continue to celebrate the rising closing prices -- and subsequent commissions -- of homes across California, Realtors should be worried about the 'onerous' threat to affordability....There was a gap -- an unsustainable inconsistency, she said --between the rate at which California was losing jobs and the rate at which housing prices were skyrocketing. The lack of new-home construction may be behind the lack of supply and subsequent boost in demand, but eventually the lack of supply would force people out of the market -- and lower the demand. Some panelists who disagreed responded: "Housing prices may be going up, but they are not necessarily unsustainable....'House prices are still not that high,' said Richard Green, a professor of urban land economics....California home prices may be outpacing some of their counterparts in other states, he said, but they still have nothing on astonishing home values buyers see in places like London, Paris or Vancouver. Even in working-class neighborhoods, home prices in Europe's metropolises are far higher than here. That indicates a willingness of the people to live somewhere because of the inherent value of the place no matter how expensive it gets."
Thanks to Connie Chung