Why Does Real Estate Cost So Much In Coastal California?

I’m reading this new book by economist Thomas Sowell — The Housing Boom and Bust.

From 2000 to 2005, the average home price in the United States increased by one-third. Millions of Americans began using their homes as ATMs, getting credit lines from numerous banks. Then in 2007, it all crashed.

* One of the consequences of reselling mortgages — almost all mortgages banks make are sold to such institutions as Fannie Mae and Freddie Mac — is that banks have little incentive to be careful about the financial qualifications of people it loans money to.

* Until 1970, home prices in California were comparable to home prices around the country. What happened?

In the San Francisco Bay Area for example, in 2005 the median-priced home cost more than three times the national average.


About Luke Ford

I've written five books (see Amazon.com). My work has been covered in the New York Times, the Los Angeles Times, and on 60 Minutes. I teach Alexander Technique in Beverly Hills (Alexander90210.com).
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