I have been posting skeptically about the role of rising interest rates and cyclical reversals in recent home price trends, in general. Last month, I noticed that price declines were oddly West-coast centered. Others have noticed that also. I speculated on Twitter that such regionally tilted data fit a localized supply story much better than it would fit an interest rate or a cycle reversal story. With new September numbers out from Zillow (
"Sunk costs are such a large part of the cost of a home that the potential downward price discovery of existing homes is large enough to find a buyer in all but the most extreme circumstances."
Re; Fig 1, who on Earth in LA's poorest ZIP codes is getting given 14:1 price:income mortgages and why?
California net migration was -250k. That is a radical change in just a few years. Maybe it is both supply and demand? I'd be interested in international migration numbers from Asia in particular. Also maybe people follow companies like Tesla out and it becomes a bit of a self-reinforcing phenomenon.
Thanks for the article!
This could be a really good thing if it persists in California, which requires sustaining political momentum. Given that the majority of voters benefit from this I'm allowing myself to feel some optimism for continued reform.
Here in the Boston Metro area things are still messed up--no new supply, transaction volume in decline, and no price decreases in the high end market. Not sure how the rest of the region is, or where it's headed, but so far it's different than 2008ish.