California Ground Zero in Upcoming Real Estate Bust


Looking for a severe real estate bust? Try Australia or California. Both represent ground zero.

The California Association or Realtors (CAR) just posted some Dismal Statistics.

  • The California housing market posted its largest year-over-year sales decline since March 2014 and remained below the 400,000-level sales benchmark for the second consecutive month in September, indicating that the market is slowing as many potential buyers put their homeownership plans on hold.
  • Existing, single-family home sales totaled 382,550 in September on a seasonally adjusted annualized rate, down 4.3 percent from August and down 12.4 percent from September 2017.
  • September's statewide median home price was $578,850, down 2.9 percent from August but up 4.2 percent from September 2017.
  • Statewide active listings rose for the sixth consecutive month, increasing 20.4 percent from the previous year.
  • Inventory reached the highest level in 31 months, with the Unsold Inventory Index reaching 4.2 months in September.
  • September year-to-date sales were down 3.3 percent.
  • Tax reform, which increases the cost of homeownership, also is contributing to the decline, especially in high-cost areas such as the San Francisco Bay Area and Orange County.

Inventory Rising Fast

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That image thanks to [Calculated Risk](

Inventory up 20%. What's the problem?

The same problem as down under: Supply of Homes on Australia Market Soars Rapidly, Major Crash Coming

Goodbye California, Hello Boise

Sky-high housing prices in the Golden State bring an echo boom—and new neighbors—to other Western states.

Bloomberg notes Boise and Reno Capitalize on the California Real Estate Exodus

Affordable Migration

Also, please consider my article Affordable Migration: Goodbye Chicago, New York, LA - Hello 5 Cities in Texas

Even liberals have finally had enough of California, Illinois, and New York.

Related Housing Articles

  1. Thud! Sept New Home Sales Plunge 5.5% from Dramatically Revised Lower August
  2. Housing Continues to Weaken: Starts Decline 5.3%, Permits Down 0.6%

Mike "Mish" Shedlock

Comments (20)
No. 1-10

Mish, your website is really F'd up. I want to click on an article but instead a tic-tac-toe mishmash of ads pops up. I'm going to Peter Schiff instead.


I just wish they'd leave their tax and tax and tax politics in California instead of trying to ruin Colorado too.


And yet they will move to "red" republican, low tax, low regulation, men should pee in men's bathrooms, pro-Constitution, pro 2nd Amendment, right to work, non-sanctuary city, etc. states and RUIN THEM.

You would think liberals/progressives would learn that their values and beliefs DESTROYED where then lived. And change.

But, like parasites, when they discover the host they infect is dying, they move to a new host.

And start the cycle again...


"Even liberals have finally had enough of California, Illinois, and New York."


This demise of California theme reminds me of Yogi Berra's quote: "Nobody goes there anymore, it's too crowded".


Texas is becoming what California use to be. Give it another election cycle or two and the rampant growth Texas is experiencing will be unmanageable. The reason booms dont go on forever is because there is an upper bound on growth that crimps the quality of life. I'm happy people are leaving California as it will only help the state manage its growth better. Texas and other growth heavy states will soon realize the limits and side effects of rampant growth. When this boom goes bust real estate across the country will go back to 2% growth in value per year. The bigger problems around the country will manifest themselves at state and local governments.


Housing prices will come down to more affordable levels and this will stoke demand. I don't see this as apocalyptic. Just a normal correction. As long as high paying jobs exist in Ca, there will be demand for housing.


In addition to high price/income and rising mortgage rates, tax reform added significantly to the monthly cost of home ownership. Check the numbers!


Please stay OUT of RENO,NV. It's already starting to get "Californicated".

Ted R
Ted R

Booms always turn into busts. Housing prices never go up forever and factor into the equation record mortgage debt and you have a recipe for disaster. The ghosts of 2008 are beginning to show themselves.