This is especially true in California's coastal areas, which have "skidded towards disaster. Just over the past year, house prices in the Los Angeles, San Francisco, San Diego and San Jose metropolitan areas have declined at more than three times the greatest national annual loss rate during the Great Depression."
This post, by Wendell Cox, a visiting professor at the Conservatoire National des Arts et Metiers in Paris, or National Conservatory of Arts and Crafts, which is operated by the French government and dedicated to providing education and conducting research for the promotion of science and industry. Cox is also author of War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” Cox bases his assertions about falling home prices on a new the 5th Annual Demographia International Housing Affordability Survey. This should come as no surprised, but this survey lists the San Francisco metropolitan area as having the worst home affordability rating in the United States.
He expects California’s prices to fall much further, particularly along the coast. "I expect median house prices could fall another $150,000 to $200,000 in the San Francisco and San Jose metropolitan areas," he says.
This is how we got here: "As median house prices climbed to an unheard-of level–10 or more times median household incomes–a sense of euphoria developed among many purchasers, analysts and business reporters who deluded themselves into believing that metaphysics or some such cause would propel prices into a more remote orbit. Yet gravity still held. A long-term supply of owned housing for a large population cannot be sustained at prices people cannot afford."
He concludes: "This may be a disaster for the speculators, architects, developers and some local governments, but for many middle class families it may seem like the dawning of a new age of reason."