> The Californians, after years of having higher salary, more savings, and a job that lets them move, goes to Texas and offers $400k for that same house. The Californian thinks it's a great deal, because they get the same size house they previously lived in for only half the price! And the seller thinks it's great, because he now suddenly gets a huge premium on his previously-valued-at-$250k-house. All of the real estate responds in kind, expecting to get $400k+ from all the Cali transplants. However, the average Texan, who doesn't have that high paying salary, gets priced out and can no longer afford a house in their city.
That makes no sense. If the housing prices in a market go up, it is because there is more demand without an increase in supply. Not because a certain group is paying almost double the market value for absolutely no reason.
That makes no sense. If the housing prices in a market go up, it is because there is more demand without an increase in supply. Not because a certain group is paying almost double the market value for absolutely no reason.