Home Prices in L.A. Soar at Record Rate - median home costs $375k

http://story.news.yahoo.com/news?tmpl=story&cid=2026&e=8&u=/latimests/20040413/ts_latimes/homepricesinlasoaratrecordrate

Home values in Los Angeles County posted the biggest year-over-year increase in at least 15 years in March as frenetic buying activity pushed the median sale price up 29%, to a record $375,000, according to data released Monday.

Confounding predictions by the experts, sales were surprisingly strong, jumping 12% from a year ago to 10,875 new and resold houses and condos. Analysts and brokers said the heavy demand was driven by anxious consumers, many of whom are paying more than the asking price to get in the housing market before interest rates rise and supplies thin further.


The inventory of houses available for sale has been at historical lows, and the latest flurry of purchases suggests that the market will only heat up as the busy home-buying season nears.


"It's going to be a total frenzy," said G.U. Krueger, an economist at the Irvine real estate venture capital firm IHP Capital Partners.

Why is the housing market so bubble-prone? Why are housing costs so high?

Why does it seem that in evey economic boom, housing prices outpace income?

absolute f***ing greed

personal piggy bank

I've heard it has to do with other investments offering a paltry return (stock market, etc) so wealthy folks park their money in real estate. Unlike soaring stock prices, soaring housing prices hurt ordinary people.

I've also heard California's prop 13 doesn't help - that tax restrictions get factored into the current buying price.

I have also heard arguments that the whole housing industry profits from higher and higher prices - realtors, lenders, etc. None of the players really have any interest in keeping prices low.

Housing is relatively supply inelastic, too - though I don't buy the argument that environmental restrictions are the cause.

Maybe this is disguised inflation - the Fed has put too much money into the economy and this is the first place it shows? Meaning soon other prices will start going up?

Greed is all around us - why housing and not, say the price of potatoes?

Just in time, as we put our house on the market this coming Sunday... and, we locked in a lower price on the house we're building last year.

http://www.ctnow.com/business/hc-homesales0413.artapr13,1,5272954.story?coll=hc-headlines-business

Of course, that's also why I'm working on my teaching certificate so that my wife and I can get the hell out when we're looking to buy a house rather than a co-op.

And we have low crime, great schools.

paying for the public infrastructure that ensure those houses exist in the first place. The people who own those homes see an increase of their overall wealth while doing absolutely nothing but God help us if the mean ole govmint places their paws on their unearned wealth.

I wish I could get MY paws on the wealth.

Thing with home equity, it does you no good unless you sell your home.

Or of course, if you are an absentee owner/speculator.

It wouldn't bother me a bit if we lost all the appreciation. We can't spend that money anyway.

Personally, I'd rather have price controls than higher property taxes. I'm sure that a regulated lending industry could impose defacto controls by refusing to finance speculation.