Last I checked, tech people still want to pop out kids in the real world and not the virtual world. Those areas are expensive because you have limited supply and people are still pumping out kids and once that clock starts ticking, people are willing to FoMo into anything. But the appeal of California is largely on the coastal areas and tech hubs like San Diego, OC, LA, SF, and Silicon Valley. Even within the state, you have those that move more inland to afford homes. This migration out is also seen among income lines: That seems fine for people that are leveraged up to their eyeballs in debt. It means a sizable portion of your cash is going into your home but you can eat McDonald’s and live in a nice crap shack.
#CALIFORNIA HOUSING BUBBLE 2021 PROFESSIONAL#
However with cheap rates and two professional working couples, swinging a $4,000 or $5,000 mortgage payment is doable. This is for a county with 3 million people. Orange County just announced that the “typical†home is now $1.1 million. “Oh, you mean you want good schools and colleges but don’t want to pay for them?†So that is where the cognitive dissonance comes in. But what this tells me is that people want the Tesla lifestyle of California but want it on a Pinto budget. We have 50 states with a variety of flavors and you are able to leave very easily. So California is not done by any means although that fits into a convenient political narrative – especially for those wanting to avoid taxes. Then you have companies like Coinbase which are riding the $2 trillion crypto currency wave (that story is still yet to be written). But you are not going to work there if you do not have the required skillset (aka a technical college degree). We still have companies like Google, Apple, and Facebook for example that are technological powerhouses and pay very well. However, you will see on the chart that those with college degrees are still coming to the state. So these people are leaving to cheaper places like Texas and driving prices up there as well. And for many, looking at crap shacks for $1 million just doesn’t seem within reach. My sense is that many of these people want the “American dream†which means owning a home. But you can look at this chart and see what is happening:Ĭalifornia is losing many adults without a college degree.
While California may not be growing as fast as it once did, it is certainly growing. California is drawing in people with college degrees and those that do not have a college degree are largely leaving. But when you look at the data, something is very clear. Also, California’s budget is now flush with cash which reinforces the idea that things are going well. Real estate supply is low and house humping people are willing to FoMo since they fear they will live in an apartment for the rest of their lives if they do not act now.
On the other hand, you look at California real estate prices and they are going up as if no pandemic ever happened. That narrative took a hit when the Texas grid went off the rails because no man is an island.
On one hand, you have the world is ending narrative and that people are moving to greener pastures to places like Texas. Depending on what you read, you are living in parallel universes regarding what is happening in California.
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