patrick.net

I guess Peter P and I will have to be content with being proven right --MP is long gone and never really accepted the sushi payoff to begin with. :-(

California is also a special case. It, along with NYC are the only two places in the country generating enormous amounts of wealth for large numbers of people. Hollywood, Silicon Valley, and Wall Street are unique in the world.

Yes, we are very special indeed. This is way housing prices will continue to go up through the end of the decade, 20% a years for many years. Don't worry, be happy.

I guess Peter P and I will have to be content with being proven right –MP is long gone and never really accepted the sushi payoff to begin with.

Let's buy ourselves sushi anyway. :)

California is also a special case. It, along with NYC are the only two places in the country generating enormous amounts of wealth for large numbers of people. Hollywood, Silicon Valley, and Wall Street are unique in the world. Of course housing is through the roof there. Best three places in the world to make a fortune. People sacrifice to grab the opportunity. Every google just increases the allure. Can’t think of a single IPO in the last 20 years that created more than 500 employee millionaires in any rust belt state. (As an aside, look at housing prices in Central London - at least double those in NYC based on square footage, because London is the only place in Western Europe to make a fortune at a young age.)

Classic Kali-phonier babble. Gold rush. Nothing more.

Ricky,

I have heard the old "my area is different" and "population growth will bailout my area" arguments many times, and they're no more true during this market cycle than they were in previous cycles. When asset prices become completely disconnected from market fundamentals supporting them (rents, incomes, etc.), prices will mean-revert --or even overshoot-- and there's nothing anyone can do about it.

Population growth is NOT outstripping housing production, but quite the opposite: usnews.com/usnews/biztech/articles/050606/6home.htm
As far as "everyone" wanting to come live here despite stratospheric cost of living, overcrowding, traffic, pollution, and a much degraded middle class lifestyle, I could point out that CA would now have negative population growth were it not for a high birth rate among mostly dirt poor immigrants: usatoday.com/printedition/news/20051222/a_census22.art.htm

Despite all those new mortgage products for illegal aliens, I wouldn't count on tomato-picker bought McMansions bailing out this bubble anytime soon. The only question is HOW and WHEN the correction will play out. Will is be mostly nominal price drops or inflation-eroded value, or a combination of both? Will it be a relatively sharp (for RE) correction of a few years, or play out for more than a decade (like Japan)?