high average home prices in CA

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posted
19 years ago

Mon, Mar 14, 2005 6:23 PM

House prices in southern california are rediculously high. Average 3 bed 2 bath house which used to cost two hundred thousand 3 years ago now costs five hundred thousand. My friend purchased his 4 bed 3 bath home(2,400 sq ft) 5 years ago for four hundred thousand; he just sold it for over a million dollars! And it doesn't even have a view! Is there a remedy for this? If Alan Greenspan raises the long term interest rate, will that help stabilize or decrease the value of homes in southern california? I hearde that Alan Greenspan is responsible for increasing short term interest rates but is he also directly responsible for increasing long term interest rate as well?

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posted
19 years ago

Mon, Mar 14, 2005 6:34 PM

I live in the east and the situation is just as bad.

The main reason for it? Around here there are no new houses being built. There is no land to put it on. So in oder to build a new house you have to buy an existing house and knock it down.

So if you put a hous on the maket today, it could well be sold today or tomorrow. If it's still on the market a month from now, someething is wrong with the house.

As far as a solution, there probably ain't one. It's a battle that has been fought around here for many years.

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- Paul A Thomas
  
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posted
19 years ago

Mon, Mar 14, 2005 6:44 PM

wrote

Home values are a function of basic supply and demand. Given that the amount of land is fixed, values will increase as long as folks want to live there*.

*That trend is beyond me.

Any "fix" of your problem through the national interest rates will kill the rest of the nations economy, so don't be expecting the other 49 states to buckle under just because you are fortunate enough to see a seven or ten fold increase in home prices before you leave the closing attorney's office and drive the interstate and walk into your new home.