Property values keep increasing in Cali

[Jon Wesner]

Anyone have thoughts on what it will take for the current real estate market to come back down to earth ? Out here in California prices are crazy high. IMO. Rents continue to rise but not fast enough to keep up with property values.

[Brian Ploszay]

I see you are from Santa Maria.  I used to live in Santa Barbara during college.   Real estate works differently in your area than most areas of the country.

One of the main reasons that real estate is so expensive in California, and especially your Central Coast, is the supply of real estate cannot keep up with the demand.   

The Central Coast has tight building restrictions because it wants to curtail growth and water supply is limited.  Outside wealthy capital also floods into these areas, causing prices rise beyond the local demand for properties.  It makes it very difficult to provide housing to people with modest incomes.  

My gut feeling is that prices can't go up forever.   Also, prices seem to already be reaching heights. This has happened in California before and a slowdown or crash occurs.  

Are prices at a peak?  Possibly yes.