An Update From Our 1 Percent World: Southern California Housing Edition
Nobody can afford ordinary houses. But mansions are on a roll.
The LA Times reports that the Southern California housing market is once again getting frothy:
But a deeper look at the market reveals a recovery divided between the rich and everyone else.
The market for high-dollar homes is hopping, with sales on the rise and buyers launching bidding wars. But sales of low- to medium-priced homes have plummeted during the same period — with many potential buyers priced out....Those declines came even as sales of high-end homes increased. Sales of homes costing $800,000 or more grew 12%, while sales of homes costing less than $500,000 fell at twice that rate.
...."We're getting multiple offers on just about everything," said Barry Sulpor, an agent with Shorewood Realtors in Manhattan Beach, where he said there is a new wave of tear-downs and new construction in prime beachfront locations. "The market is really on fire."
I think partly this is a bit of a statistical artifact: a lot of investors were buying cheap houses a year ago, figuring they could rent them out and make a killing. That didn't work out so well, and now a lot of those houses are back on the market. Long story short, some of the increase in low-end housing prices over the past year or two has been a bit of an investor-fueled mirage, and now reality is catching up to that.
Still, the overall picture is clear: At the lower end of the market, ordinary people have been increasingly locked out for a while, and that's still the case. Nor is it any surprise. After all, median wages have stagnated during the entire period that we so laughingly refer to as a "recovery." As always in our brave new 1 percent era, things are going pretty well for the rich. For the not-so-rich, not so well.