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March 26, 2017

California Housing Market Setting Up For A Crash (Video)

By EconMatters

We discuss the fact that the cost of living in California is unsustainable and rising, an average middle class home is going for $600,000 in some areas of California, and this isn`t the highest areas in California, and House Flippers cannot lose right now regardless of how much they spend on renovations and going over budget, throw in corporations moving out of the state, and this is all setting up for a massive real estate collapse in the high cost of living state. California citizens are spending too much as a percentage of their annual salary on mortgages, all their other costs are higher as well, as a result there is very little margin of error for any downturn in the state`s economy.

This sets the market up for a sharp crash scenario which has cascading repercussions throughout California`s fiscally irresponsible government spending credit profile. California`s true financial health right now is being masked because their economy has performed above trend due to the recent technology boom of the last 8 years, if we look underneath the surface, things look pretty bad for many California municipalities being able to fund their massive spending programs which result in annual budget deficits. In short California is on the verge of a financial crisis, they just don`t know it right now, and the real estate market in California is going to correct substantially over the next five years.

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Item Reviewed: California Housing Market Setting Up For A Crash (Video) Rating: 5 Reviewed By: EconMatters