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.

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About Luke Ford

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