Actually, it’s already on the way to being fixed the old fashioned way - with a market crash. Inventory is rising, volume is dropping, and while prices are going up - that is pretty common as the market starts to grind to a halt.

[https://www.redfin.com/state/California/housing-market]

When the line keeps going up and to the right, everyone builds that into their spreadsheets and times are good.

When the line starts going down and to the right, they hope it’s temporary. But after awhile, they need to update their spreadsheets - and then times are bad.

As long as the fed keeps rates high, the crash is inevitable. I give it another year or two.

Bankruptcies are likely to be incredibly painful.

Theres so much pent up money that Powell just has to tweet a picture of a dove and the market will go up 15% the next day. Markets been lumbering up since mid april despite all the doom and gloom narrative with the interest rate and continually being told no cuts for now by the fed the entire time. Anytime the fed says no cuts recently, seems like its Powell creating a buying opportunity more than anything and a week later the ship is back on course. Whenever they do cut rates this year there will be fireworks.

The issue the Fed is trying to resolve is exactly too much money freely moving around - also known as inflation.

We’ll see when things change, but for now they’re not freeing up cash. And the housing market in particular’s momentum has been steadily changing.

I hear predictions of crash every year since 2012-2013 at least. Foreclosures are still low. Inventory rising is locale dependent thing, e.g Palm Springs - basically vacation home flips/airbnbs. I dont see how it could crash when stocks are still at all times high

Many of the stock market changes are in line with inflation, but yup - we could be in for more pump. We’ll see how it goes.

I see your point, but a crash would be extremely bad for the states budget, which is already struggling. Hopefully a small correction at most.

The market also does seem strangely stubborn to correct.

This will not be a small correction.

So many people 'want' a correction that it's clear there is a ton of demand. Ergo, I wouldn't be too hopeful.

Last year maybe, now everyone is either giving up or white knuckling it. In my experience, that’s when it gets moving.

subsidies for construction is the obvious answer that we're too stupid to be able to implement.

Subsidizing a heavily regulated industry sounds like a good way to waste a lot of money.

Construction is expensive but at least not difficult. Entitlement and permitting are the real nightmare here. It's why we basically don't build anything.

what about the massive amount of housing starts that dropped off after the financial crisis and took a while to recover, and never got back to the same level? that seems like a big part of the problem too. https://fred.stlouisfed.org/series/HOUST

How many of those are in California?

idk, i'm curious but ain't got time to look for that. you should look it up if you're curious, or are you trying to make a point?

The article is about California and I would suspect that relatively few entitled projects are abandoned there. If you know where to get the relevant data, please share.

that would be the "we're too stupid" part

Completely unnecessary. With prices that high developers are very happy to construct things.

All that's necessary is for the government to get out of the way. i.e. dramatically reduce zoning and permitting requirements.

Homebuyers and developers want construction. Governments and NIMBY's don't want it.

but they're not. They're building luxury condos because they pay out the most and they need to do that because the cost of construction is so high. if the cost of construction was lower, then it would be affordable to do non-luxury non-condo construction.

If that's even true it's only because they are so limited in what they can build.

Remember there's a limit to how many of those can be sold. Once you've sold them all they'll build sometime else

But only if the government lets.

Federal intervention? The state should manage itself.

That would be great but it's not going to be swift or sufficient. The thing that would really do the trick is overturning Euclid v. Ambler, and really only SCOTUS or Congress can do that.

> The thing that would really do the trick is overturning Euclid v. Ambler, and really only SCOTUS or Congress can do that.

Congress really can’t (the existing federal judiciary would be more likely to find any federal legislative attempt to limit local zoning a violation of the 10th Amendment than to give it effect); SCOTUS could, either directly or collaterally, but it seems unlikely (for one thing, to even make it to the merits you’d probably need someone who took ownership when the property wasn’t subject to zoning restrictions and where a claim wouldn’t be time-barred given the length of time since the zoning rule was enacted; its not 1922 anymore, and the problem isn’t new zoning.)

Congress could propose an amendment to overturn it – or to more directly limit zoning – but it would take a supermajority of states to sign on to give it effect, and if you had that, well, you’d probably have a supermajority of states limiting zoning without federal intervention, too.

That case was more about separating industrial and residential land. Zoning is a good thing but putting a cap on development within a zone is what has caused these issues with prices and a lack of housing supply. Everywhere that you'd consider first world has some zoning. Tokyo too of course; you can't just open a landfill next to your neighbors house for example, but at the same time there's a lot of by right development that adds housing capacity if the area can handle height with respect to the available infrastructure.

The case was about building residential in a residential area.

https://tile.loc.gov/storage-services/service/ll/usrep/usrep...

Read it again:

"The recent industrial development of the City of Cleveland, following the railroad lines, has already reached the Village and to some extent extends over into it. In its obvious course, this industrial expansion will soon absorb the area in the Village for industrial enterprises. It is in restraint of this prospect that the ordinance seeks to operate. In effect it erects a dam to hold back the flood of industrial development and thus to preserve a rural character in portions of the Village which, under the operation of natural economic laws, would be devoted most profitably to industrial undertakings. This, the evidence shows, destroys value without compensation to the owners of lands who have acquired and are holding them for industrial uses."

"...the ordinance of its own force operates greatly to reduce the value of appellee's lands and destroy their marketability for industrial, commercial and residential uses; and the attack is directed, not against any specific provision or provisions, but against the ordinance as an entirety."

we need to repeal the faircloth amendment.