Villaraigosa and Newsom want to build more houses in California than ever before. Experts see the candidates' goal as an (Los Angeles: fit in, to rent)

[expatCA]

Originally Posted by FirebirdCamaro1220

Do you realize how backwards your statement is? "Flatlining prices won't help, so let's just do nothing and let them continue to increase" That doesn't make any sense. If supply lags enough, then even the ghettos become expensive, like in 2006, when houses in South Central we're going for $600k, which is insane, because no one who could afford a $3k/month mortgage payment would dare buy a house in South Central. That was the true indicator that things had gone off the rails then, eventually the same thing will happen again with your "just don't build anything" mentality

Totally different circumstances then. Loans for those $600,000.00 houses were going to people who could not afford them, banks and the Gov't giving stupid loans and people drawing against the equity and ... the market collapsed. That is not happening right now.

Prices increase based on ... supply and demand. To increase the supply it would have to be beyond what the builders are capable of and by the time they were built people would have bought them and prices would still go up. You can't build fast enough to get ahead of demand. No builder is that stupid, they would not build if prices went down as they would lose money. That is why building almost stopped in the last recession. No money to be made. Then if prices dropped there would be even fewer resales as people would sit on their homes as the owners today are not like the stupid ones in 2006.

Note, I never said don't build anything, so please do not twist my words. All I have said is you can't build fast enough and prices will not go down. Even Skyscrapers in LA have very high priced units. Please, where is a builder building cheaper homes in SoCal in popular areas?

[expatCA]

Originally Posted by mysticaltyger

You're being ridiculous. The law of supply and demand applies to housing as it does to anything else. You clearly don't understand the filtering theory of housing, despite my explaining it.

"Making enough money" doesn't fix the problem. If everyone finds a way to make more money and housing supply doesn't increase, then prices just inflate some more.

Government policy is a big part of what's wrong. Yes, a lot of areas don't have much buildable land. But limited land isn't the same as no land. We're not talking about Midwest prices here. We're taking making an attempt to make California a place that isn't the rich vs. impoverished serfs, which is what's it's becoming. And that's mostly a result of policy decisions.

California hasn't build enough housing for decades and economists from across the political spectrum have been saying so for decades.

I agree not enough houses have been built to keep up with demand. It never will occur as builders are in the business of making money. Even now materials are going up as the fires, hurricanes, etc have caused a supply shortage. This is reality, no matter how frustrating it is.

How do you make the popular places a place for the not only the rich or poor? Some policy decisions may be bad to you, but not to everyone. The land owners get to make the decisions, not the people who want their land. Lets try your idea in Beverly Hills and see how it impacts prices. Tear down the mansions and build apts at a low price.

[FirebirdCamaro1220]

Originally Posted by expatCA

I agree not enough houses have been built to keep up with demand. It never will occur as builders are in the business of making money. Even now materials are going up as the fires, hurricanes, etc have caused a supply shortage. This is reality, no matter how frustrating it is.

How do you make the popular places a place for the not only the rich or poor? Some policy decisions may be bad to you, but not to everyone. The land owners get to make the decisions, not the people who want their land. Lets try your idea in Beverly Hills and see how it impacts prices. Tear down the mansions and build apts at a low price.

Builders still build when prices fall, they only stop once they don't think a profit is going to pencil out, I've seen it here even. Building slows with falling prices, but doesn't stop as long as the properties still sell for a profit

[jm1982]

Originally Posted by FirebirdCamaro1220

Builders still build when prices fall, they only stop once they don't think a profit is going to pencil out, I've seen it here even. Building slows with falling prices, but doesn't stop as long as the properties still sell for a profit

In L.A during the crash there was hardly any building . Most of it was because financing became so difficult .

[CamaroGuy]

Both Newsom and Villar are in deep with the developers. We are screwed big time if either one of them becomes governor.😧

[Electrician4you]

Originally Posted by mysticaltyger

You're being ridiculous. The law of supply and demand applies to housing as it does to anything else. You clearly don't understand the filtering theory of housing, despite my explaining it.

"Making enough money" doesn't fix the problem. If everyone finds a way to make more money and housing supply doesn't increase, then prices just inflate some more.

Government policy is a big part of what's wrong. Yes, a lot of areas don't have much buildable land. But limited land isn't the same as no land. We're not talking about Midwest prices here. We're taking making an attempt to make California a place that isn't the rich vs. impoverished serfs, which is what's it's becoming. And that's mostly a result of policy decisions.

California hasn't build enough housing for decades and economists from across the political spectrum have been saying so for decades.

Because you CANT keep up with the demand. To keep up with demand you need to build 100,000 houses per year. That’s basically building one new city every year. You also need the infrastructure to support that city. Streets, freeway, cops firefighters utilities, hospitals food stores and shops. You also need the people to build those houses streets hospitals fire houses police stations, utility stations. And all those people will need houses.
You would need 200,000 houses a year built to meet current and future demand and lower prices.


It’s EASY to say build more houses and everything will be ok houses will come down in price and will be affordable.

[FirebirdCamaro1220]

Originally Posted by jm1982

In L.A during the crash there was hardly any building . Most of it was because financing became so difficult .

Building stopped everywhere during the crash. Again, I'm talking modest 1-3% drops in price, not what happened in 2009-2011, with 50%-70% drops in some places; there was no profit to be made anywhere, so building stopped. Doesn't contradict what I said at all

[FirebirdCamaro1220]

Originally Posted by Electrician4you

Because you CANT keep up with the demand. To keep up with demand you need to build 100,000 houses per year. That’s basically building one new city every year. You also need the infrastructure to support that city. Streets, freeway, cops firefighters utilities, hospitals food stores and shops. You also need the people to build those houses streets hospitals fire houses police stations, utility stations. And all those people will need houses.
You would need 200,000 houses a year built to meet current and future demand and lower prices.


It’s EASY to say build more houses and everything will be ok houses will come down in price and will be affordable.

Houses aren't the way to solve a housing crisis, apartments and condos are. It is easier and takes less land

[Electrician4you]

Originally Posted by FirebirdCamaro1220

Houses aren't the way to solve a housing crisis, apartments and condos are. It is easier and takes less land

It isn’t any less expensive. I finished 4 multi use apartment buildings in DTLA. Easy building had a average land acquisition cost of 50 million dollars. That’s not build cost. It’s strictly to buy the land. Easier and taking less land doesn’t mean crap to a builder. They are going to maximize their profits and get as much as they can for the unit. I know I would
Only way it’s gonna be cheap is it it’s subsidized but then someone else is picking up the heavy lifting

[Peasy973]

Originally Posted by FirebirdCamaro1220

Builders still build when prices fall, they only stop once they don't think a profit is going to pencil out, I've seen it here even. Building slows with falling prices, but doesn't stop as long as the properties still sell for a profit

Builders will only build if they can make a profit. There was a lot of homes in IE especially in the High Desert (I know some ppl I used to work with that lived up there) that got knocked down because they couldn't sell to anyone.

What's going to happen is that there will be so much upward pressure (due to inflation from the tax cuts, chronic deficits, etc) that banks/lenders will be forced to provide high-risk loans like before. Just history repeating itself.