Home Prices Threaten Local Economy
For LA the picture is getting clearer even if you have to go to the bottom of the article to find it. "One problem that’s exacerbated for Los Angeles and other Western states with strong housing markets is the rising disparity between personal income growth and housing prices, a key indicator of a bubble."
"In California, personal income rose 2.7 percent last year, while housing prices were up 23.4 percent. 'In the long-term, personal incomes rise at about the same rate as housing prices, so we’re obviously seeing bubble activity,' said Dawn McLaren, an economist at Arizona State University."
The Modbee tells us that the spread inland isn't making everybody happy. "Fontana Mayor Mark Nuaimi, who moved to the city a decade ago and commutes 43 miles each way to Anaheim. "The regional freeways are death,' he said."
"Joe Minasso sold his house in Victorville when his 50-mile drive west to Ontario grew from 40 minutes to two hours. His new home in Fontana will save him time but add about $125,000 to his mortgage. 'The drive for me is worth the extra money to pay for the house,' he said."
"'There are a lot of different things that can derail the U.S. economy, but what we know for sure is that there will be a recession,' said Joseph Magaddino, at Cal State Long Beach. 'We just don’t know when.'"