Cleveland is not actually that cheap (it just looks dirt cheap to people earning Californian dollars). And Cleveland would instantly be as expensive as California, if Silicon Valley headquartered there instead of California -- the fact that 900k people once lived there would not help in any way.
The prices of places is largely not determined by supply or demand. It's determined by the value of the property around it, and that property in aggregate is determined by the wealth of the jobs congregated there, and the concentration of capital located there. Only by redefining "demand" to not mean "persons needing homes" but instead to mean "anything that impacts the price" can you make a supply vs demand model work for housing.
> The population of LA in 1960 was 2.4 million. Today, its over 4 million in the city proper. Units in LA are on the market for a weekend, you sign your lease on monday, and move in by thursday.
The population of Grand Rapids, Michigan was ~198k in 1970. Today, it's still ~198k in 2020 -- same population, almost exactly. Despite this, units in Grand Rapids are on the market for a weekend, you sign your lease on Monday, and move in by Thursday. Despite this, units cost has increased by about 700% during that time.
Because, again, supply and demand are not the primary factors in housing costs in the US. They haven't been for over 50+ years now.
The value of something is set by what people are willing to pay for it. I.e. supply and demand.
> Despite this, units cost has increased by about 700% during that time.
Average inflation since 1970 is 565%. 700% is within that, as inflation measurements are inexact and there are regional differences as well.
Taking Cleveland for example, despite there being a massive surplus of housing units as you say, the average price of rent is 1123$, while the average household income is of only 26179$. This means that the average household pays 51% (!!) of their income into housing in recent years, while there is a surplus of housing.
I don't understand how this can be stated as supply and demand. It seems to me that rent simply increases so as to saturate the budget of the lower class, regardless of supply.
I would also observe that in most cities the average price of housing as a share of average income is steadily rising. This leads me to believe that what is actually happening is that prices of rent are increasing synchronously,