doctorhousingbubble.com / By Dr. Housing Bubble / December 2, 2012
One of the more common e-mails that I get regards middle class families trying to purchase homes in California. To the point, many look at their budgets and sky high home prices and wonder what is going on. Over the last decade if we look at the data, it is clear that living what people would think is a “middle class” lifestyle in California is nearly impossible for those that are middle class. Yet I would also question what they include in this middle class lifestyle (i.e., expensive private schools, SUVs, etc). When we examine certain areas home prices are back to peak levels while household incomes remain stagnant. You have inland regions of California with more affordable housing yet employment sectors that are weak. Someone sent over a recent study examining migration patterns for the state and the results are very telling. Many Californians have left the state to pursue what they feel are better opportunities. Fewer people from other states are also coming over.
The California balance of migration
From the 1960s all the way through the early 1990s, California had a healthy dose of both domestic and foreign migration. In the 1990s the balance shifted heavily to foreign migration and has remained the case ever since: