So Ca History

M

movingaround_IHB

New member
<p>I was wondering if anyone has ever seen real estate numbers comparing So. Ca home prices to other areas of the country back into the 50s 60s and 70s. Has Ca always cost more than other areas in the country? Reason I ask is a couple people have told me lately that when they moved here (i.e., 30 years or so ago) prices also seemed high then. </p>

<p>The upshot of my question - do people think that home prices in Ca will always be higher than the rest of the country??!!</p>
 
<p>In 1976 median prices for new construction were:</p>

<p>Chicago: $62,100 </p>

<p>Washington DC: $67,700</p>

<p>Los Angeles: $72,100 </p>

<p>Source: <a href="http://www.time.com/time/magazine/article/0,9171,915445-1,00.html">http://www.time.com/time/magazine/article/0,9171,915445-1,00.html</a> </p>

<p>A teardown in Beverly Hills is $185,000 in 1976 according to this article.</p>
 
I can't find any charts or data around here. I believe OC was a normal "median house is 3x the median income" market until the 60's, when the sunshine tax took over. The trendline has been about 4x ever since, though I'm sure the last five years have pulled it higher.
 
<p><a href="http://query.nytimes.com/gst/fullpage.html?res=9900E0DD1639F937A15756C0A963948260">http://query.nytimes.com/gst/fullpage.html?res=9900E0DD1639F937A15756C0A963948260</a></p>

<p>OC median in 1985: $132,100</p>

<p>Should be very feasible to compare prices and incomes against this benchmark. The watershed year for CA real estate was the passing of Proposition 13 in the late 1970s. Also CA has had very tight zoning regulations in recent memory which substantially curbs supply growth. Prop 13 has meant a large number of Californians are reluctant to sell their houses even if they could not remotely afford to live in them at current prices/property tax rates driving down the supply of existing homes. Elimination of Prop 13 would drive down house prices but likely increase median incomes as older residents would sell their homes to individuals with higher incomes or larger families. Proposition 13 at heart is a subsidy to long time residents of CA at the expense of more recent arrivals.</p>
 
<p>I was wondering if taxes had anything to do with it. We are moving here from an area in NY where my total property taxes school plus town were 2.5 - 3 % - substantially higher than the 1% taxes here in CA - and much higher than the people in ca still benefitting from prop 13. Where we lived in NY housing prices were low - partly because nobody can afford the taxes on a more expensive home!</p>

<p>Even 4X the median wouldn't be so bad now!</p>
 
Amazing that there are articles online from the 70's and 80's - very interesting - thank you for finding them! Seems like Ca has been a pacesetter for awhile.
 
I found an LA Times story from 1930 (that's right, just as property values last began to tank like they are now on a national level) that detailed why it was a great time then to invest in real estate. <a href="http://www.southoctracker.com/2008/04/new-era-in-real-estate.html">Blog post with analysis here</a>. Some priceless quotes from the article:





*"land-ownership has brought financial independence to more persons in this country than has any other form of investment."





*"The present is called a buyer's market <strong>not because realty values have sagged to new low levels</strong>, as in the case of many stocks, but because there has been a leveling-out period which is considered a logical approach to another era of ascending values."





*"Realty values, where the location is well chosen, are apt to be fairly stable and subject in a much smaller degree to the influence of <strong>temporary</strong> <strong>economic conditions </strong>which send stocks bobbing up and down like so many corks."





*"Unlike some past occasions of the kind, this depression has not been accompanied by an acute money stringency - in fact, money for permanent investment has been more plentiful and has commanded a lower rate"





*"...it is conservative to say that <strong>conditions are unusually favorable for investors in real estate</strong>, not only for appreciation in the value of their present holdings but for well-considered additions thereto."
 
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