Immigration Tanks California Real Estate

By Randall Burns

03/14/2008

Alex Veiga reports at AP:
The median price in a six-county area of Southern California fell to $408,000 — the lowest level since October 2004, when it was $402,500. That median is 19.2 percent below the region’s peak price of $505,000 last summer, and it’s 1.7 percent below January’s median, the firm said.

In the nine counties of the San Francisco Bay Area, the median price fell 11.6 percent to $548,000 compared to a year earlier and 17.6 percent from the region’s peak median price of $665,000 last summer. Bay Area prices were essentially flat from January.

What happened in a nutshell: California prices were propped up because of migration from the rest of the US — and immigration from other parts of the world. Now, Americans are leaving California faster than they are coming — and the productivity of the newcomers isn’t enough to support the insane values of California real estate.

The California of today is has become more like Mexico — and more like Hong Kong — but mostly more like Mexico. That means more corrupt and poorer services. We are even seeing shanty towns emerge in Socal — and many of the residents don’t appear to be recent immigrants.

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