People Living in their Cars in California? | Armstrong Economics

02-09-18 07:30:00,

A very interesting issue has emerged in California. The price of real estate rose so high that the median price for a home reached $600,000 and the price was just too high. Consequently, people began to take up residence sleeping in their cars. A recent article looked at the issue and found that 15,000 people live in cars, vans, and RVs in Los Angeles alone. They were citing the US Department of Housing and Urban Development. This was just LA alone. Real Estate is starting to crash in California because (1) it exceeded the cost of the average person, and (2) taxes are rising and that further reduces the net disposable income. It is not just the price of the house, as taxes rise they reduce the take-home pay and thus the price of a house after taxes rises even faster. These two trends are colliding and this is why California real estate has begun to decline.

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