Home prices in California are down 2% year-over-year and roughly unchanged since July 2022.
By Wolf Richter for WOLF STREET.
California’s population declined again in the 12 months through July 1, 2025, to 39.36 million people, after two years of growth, and is 200,400 people below the “estimate base” of April 1, 2020 (39.56 million), according to the Census Bureau annual data on the US population.
That put California’s population where it had been in about 2017 – essentially eight years of no population growth.
The decline was caused by a plunge in Net International Migration (immigrants minus emigrants). NIM was still positive but much lower than in the prior three years. Net domestic migration continued to be negative, but at a slightly lower rate (more people moving to other states than moving from other states to California). And natural growth (births minus deaths) edged down a hair.
Net International Migration plunged by two-thirds under Trump’s immigration policies. In the 12 months through July 1, 2025, NIM was only 109,300 people, meaning that 109,300 more people immigrated from other countries to California than emigrated from California to other countries.
NIM plunged in every state in the US during this 12-month period, and has plunged in the US overall. While NIM was low for California, it was still the third highest of any state in the US behind Florida (178,700) and Texas (167,500).
But this period through July 1, 2025, still included six months of Biden’s immigration policies. The effects of a full year of Trump’s immigration policies will be reflected in the 12-month period through July 1, 2026 (data to be released in December 2026).
The Census Bureau expects NIM to decline further and projected for the US overall that it could turn “negative” if current trends continue.
Net Domestic Migration in the period through July 1, 2025, was the least negative since the lockdown: 229,100 more people left California to other states than arrived from other states.
California has always been a “gateway” state, with many people arriving from other countries, while established people leave to other states, creating a constant flow where California acts as a gateway. When California’s population was still growing, high Net International Migration compensated for Net Domestic Migration, with natural growth doing the rest.
Natural growth (births minus deaths) inched down to 109,700, a hair below the prior year, a hair above the two years before – so roughly stable, but not enough to compensate for the massive plunge in NIM.
But California’s huge population is largely packed into massive urban areas at the southern tip of California and in the Bay Area, which are immensely congested, with horrendous traffic, forever urban sprawl, and for many people infernal commutes. The government wants a larger population in order to collect more taxes to pay for its promises and pet projects, but the people that are already here?
Over the five years from the “estimate base” on April 1, 2020, during which California’s population declined by 200,394 people, Texas added 2.56 million people and Florida added 1.92 million people.
| Most Populous States | ||||||
|
Estimate Base April 2020 |
1-Jul-2024 | 1-Jul-2025 | YoY |
since 2020 Estimate Base |
||
| 1 | CA |
39,555,703 |
39,364,774 | 39,355,309 | -9,465 |
-200,394 |
| 2 | TX |
29,149,498 |
31,318,578 | 31,709,821 | 391,243 |
2,560,323 |
| 3 | FL |
21,538,207 |
23,265,838 | 23,462,518 | 196,680 |
1,924,311 |
| 4 | NY |
20,203,696 |
20,001,419 | 20,002,427 | 1,008 |
-201,269 |
| 5 | PA |
13,002,753 |
13,045,848 | 13,059,432 | 13,584 |
56,679 |
| 6 | IL |
12,821,741 |
12,703,033 | 12,719,141 | 16,108 |
-102,600 |
| 7 | OH |
11,799,445 |
11,860,621 | 11,900,510 | 39,889 |
101,065 |
| 8 | GA |
10,713,861 |
11,204,208 | 11,302,748 | 98,540 |
588,887 |
| 9 | NC |
10,441,392 |
11,052,061 | 11,197,968 | 145,907 |
756,576 |
| 10 | MI |
10,079,362 |
10,099,962 | 10,127,884 | 27,922 |
48,522 |
The “Housing Shortage” has been a huge topic in California for years, and a series of state laws have been passed to deal with it, to overcome local opposition to new construction, and especially to increased density. So kudos. Bring on the supply, by all means.
There is obviously no actual shortage of housing; but there is a huge shortage of housing that people can comfortably afford. That’s the result of the price surge that lasted for years, and a separately timed rent explosion. Home prices and rents are too high – that’s the problem.
But a declining or stagnant population combined with newly built supply provide the market with the tools to deal with the price-and-rent issue.
The total housing stock in California grew by 125,300 housing units (70,700 single-family homes including ADUs and 53,500 multifamily units), to 14.95 million housing units by January 1, 2025, according to the latest report by the California Department of Finance (the next report will be released in May).
In the prior year, the growth in housing units was similar, according to the Department of Finance.
New private housing units authorized by building permits have been running between 100,000 to 120,000 per year over the past 10 years through 2025. So if these new-builds are occupied on average by 2.3 people per unit, they would create housing for about 253,000 people per year, or for about 2 million people over those eight years during which the population didn’t grow, despite the ups and downs in between.
Overall home prices in California are down by 2% year-over-year and nearly flat with July 2022, seasonally adjusted, according to the ZHVI – with big declines in some places, such as Oakland, and firmer markets in other places.
But from 2012 to 2022, in that decade, home prices exploded by 174%. That’s the problem. And a stagnant or declining population along with new supply can address that problem further:
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California, the state I live in, definitely is in a pickle. It has budget shortages projected for several years to come, and it just keeps passing laws it can’t pay for. The solution is to generally try to increase taxes on wealthy but of course that drives people out. When I retire I would much rather be in a state that doesn’t grab 9% of my IRA withdrawals. I work for the state and we got 2 years of 5 hours a month of forced leave to try to help deficit. The governor’s fan club isn’t exactly growing in size despite the free advice on how to have mafia style hair.
What we need is an ‘open labor migration framework’ with India (similar to the one the EU just agreed to). It is bidirectional, so many Europeans will be able to move to India for work. Such a framework would also address H-1B talent shortages for Google, Meta, and others in California.
For a minute there I didn’t realize you were being sarcastic – took me a little while to figure out that you weren’t just out of your mind…
I’m still having trouble thinking of which one would be most ludicrous, that immigration might have some equilibrium to and from India, or that the big tech companies aren’t primarily just trying to reduce their labor costs.
Good one!
Europeans will beg to go back immediately upon landing in India!
No, that is the last thing we need. No need to import huge numbers of people from India.
WE need very little from india our own kids are going unhired in record numbers to save money while they have record profits you need to look at reality
andy was being sarcastic.
Kids are going unhired because they aren’t applying for jobs. The youth unemployment rate is close to the lowest it’s been since 1970.
I am aware of many STEM undergrads from good colleges, looking for jobs. The job market is terrible for them.
Big companies would rather hire people on visa instead of Americans. The people on visa have a wait time of atleast 15 years to get their green card. It means they are dependent on their H1B employer to keep them hired. This makes them extremely servile, docile and compliant workforce.
Amazon laid 30K plus people in last 1 years or so but still needing 10s of thousands of people on H1B.
Yeah let’s just destroy the demographics of the country. No big deal.
There are NO H-1B talent shortages! The entire thing is a scam for big tech to bring in cheap labour so they don’t have to pay US workers higher wages.
JFC your comment is enraging.
DT, I thought the sentence about Europeans moving to India for work will replace the /s tag.
Indians haaaaaaaattttttteeeeeeee the British just fyi
Its all about congressional seats and perception.
Trump just announced “I don’t want to drive housing prices down, I want to drive housing prices up.”
If this isn’t the most horrific, out-of-touch message to the young, I don’t know what is. It’s simply disgusting. He captured the populist vote and then did this. Purely reprehensible pigman, just like the rest. Fraud.
Just please don’t come to Boston
We don’t want you , we already have enough edward bernays zombies
The man is clearly losing his mind. not that there was much there to begin with.
Yep, when I heard that attributed to him, I had to search it myself, as I could barely believe it.
It’s like the entire elite, left and right, is all united in ensuring that assets stay and become even more unaffordable.
I’ve never seen such a “I have mine, so f*** everyone behind me” from the elite in America in all of my time on this Earth.
He also said there’s no sense lowering housing prices so “somebody who didn’t work very hard” can buy a home.
It will be interesting to see if the Dems pounce on that, or if they feel the same way.
He bragged about doubling the net worth of the elite at Davos! It’s the most important grade in his mind on the report card. The upcoming state union speech in late Feb, stock market performance is his indicator of success or failure.
AI Did trump say “I don’t want to drive housing prices down, I want to drive housing prices up.” ?
Yes, Donald Trump said, “I don’t want to drive housing prices down, I want to drive housing prices up,” during a Cabinet meeting on January 29, 2026.
Context of the Statement:
Targeting Homeowner Wealth:
Trump made these comments while arguing that he wanted to protect the value of homes for existing homeowners, stating, “Existing housing, people that own their home, we’re going to keep them wealthy, we’re going to keep those prices up”.
“Hard Work” Remark:
He further stated, “We’re not going to destroy the value of their homes so that somebody that didn’t work very hard can buy a home”.
Proposed Solution:
While expressing the desire for higher home prices, Trump indicated he wanted to make it “easier to buy” a house by lowering interest rates, rather than by lowering the price of the homes themselves.
Reaction:
The comments, made amid a nationwide housing affordability crisis, were criticized by some for being out of touch with voters struggling to afford homes.
This statement was made in January 2026, during his second term, and was viewed as a, contradictory to some of his previous rhetoric regarding making housing more affordable.
In the end, this is all simply a reflection of the deadly, dead-end box canyon that Fed ZIRP/housing inflation/”wealth effect” illusions lead to.
1) The political crack cocaine of money printing (“Every DC policy funded!! No matter how stupid or counter-productive!!”)
2) to drive interest rates towards zero (savings are the devil under DC Keynesianism)
3) grotesquely engorged asset values (housing and equities) far beyond historic norms (see median sales values and PE ratios),
4) covering up the accelerating loss of US international competitiveness (China)
5) Until the lies and illusions became simply unaffordable even using the same manipulations as before.
And all along this path of self-destruction, the promoted experts proclaimed, “We know what we are doing!!”
You’re correct, per the norm a statement taken out of context – also usually done for political purposes.
Interest rates.
Inflation.
Eliminating and/or reducing the market footprint of speculative enterprises like Blackrock.
The FED, politicos, MMT “theorists”, Wall Street largely created this mess through excessive asset financialization.
One might also add immigration policies and taxpayer funded living spaces.
A very large, very political financial and moral abyss.
His only saving grace would be choosing Kevin Warsh as Fed chair. He is a Fed hawk. And he would continue to lower fed balance sheet.
I never thought I would actually get to this point, but I actually trust Jerome Powell more than Trump at this point. That’s how out of touch Trump is with interest rates and these asset price bubbles. The FED and .gov caused them, but to try to pump them up even higher is diabolical. The prices of everything are so high that they threaten to collapse everything once they crack.
@Depth Charge I agree with you but saying “I actually trust Jerome Powell more than Trump at this point” is like saying I trust the used car dealer in the plaid blazer and brown belt more than I trust the used car dealer down the street with the plaid blazer and white belt”…
As a young man I was involved with politics and learned that 99% of the prople in politics are “narcissistic sociopaths” and I do whatever I can to never be in the same room with anyone involved with politic s in any way.
I am surprised ( and pleased) that Warsh was the pick.
He has the intelligence and gravitas to deal with the “often wrong but never in doubt “ Academic PhDs that populate the Fed.
This is going to be volatile, fascinating but I’m hopeful for the first time in a long time that our monetary policy will be put on a sustainable path
I read his speech from 2007 (it’s available on the Fed’s website), and I’m hoping he’s changed his mind on some of this since then.
“This view highlights both the risks and rewards of liquidity. The benefits of greater liquidity are substantial, through higher asset prices and more efficient transfer of funds from savers to borrowers. Historical episodes indicate, however, that markets can become far less liquid due to increases in investor risk aversion and uncertainty. While policymakers and market participants know with certainty that these episodes will occur, they must be humble in their ability to predict the timing, scope, and duration of these periods of financial distress. Recall the market turmoil related to events in Asian financial markets in 1997 and following the Russian bond default in the summer of 1998. Investors flocked to “on-the-run” Treasuries, and risk spreads for high-yield corporate and emerging market bonds spiked. Chairman Greenspan described these episodes as an apparent collapse in investors’ understanding of possible future risks, despite what appeared to be mild imbalances, which led to “disengagement” by traders.”
Thanks!
So your TDS is showing you took 5 words and missed the other 1000 he has said about home affordability the last month … and only people that have sat on the sidelines to long waiting or buy to many avocado toasts want a housing price crash welcome to 2008 ….
You are a blind partisan lemming, too dull to hold people accountable for their actions.
Haven’t we all seen enough of Trump to know that his words, good or bad, are mostly meaningless?
What action is he taking on the issue?
Real estate guy wants to make more money.
News report @6pm!
Lol
Didn’t he also say he wanted to curb corporate ownership of housing?
There was a great article here on Wolf Street recently about anomoalies related to OER in the CPI ( https://wolfstreet.com/2025/10/24/massive-outlier-in-owners-equivalent-of-rent-pushed-down-cpi-core-cpi-core-services-cpi-something-went-awry-at-the-bls/ )
I dont’ know all the nuances of how housing costs are accounted for in the CPI . But, as our digital world allows (some) people to move from higher-priced locales to lower-priced locales, this will potentially mask a significant amount of housing cost appreciation.
If three people are sharing a one-bedroom California apartment that costs $6k/month, as housing prices drop, maybe you will have two people sharing $5k/month one-bedroom apartments. The cost per person rises from $2k to $2.5k as they get more space. The cost per square foot per person gets lower (since each person now has more space) From the renters’ perspective the cost has gone up. But from the landlord’s perspective, prices are flat.
I might spend some of the chilly weather digging into this because it’s possible that we could have a core CPI that shows no rise in housing costs or maybe a drop in housing costs even as prices go up as a percentage of income.
That would make the official numbers somewhat accurate (calculated according to stated methodology) but useless (as not reflecting actual costs paid by consumers of housing)
In terms of housing costs and CPI, your homemade theories are completely bogus because you don’t know how the housing cost CPI works.
The CPI for Rent tracks a large panel of addresses in every major city, the same addresses for many years. Tenants and owners come and go. The survey doesn’t go to a person who lives there; it goes to the address. Whoever lives there responds to the survey of how much rent they paid that month. In this way, BLS collects a large database of rents at EACH of these addresses going back many years. It doesn’t matter who the people are who live there, or how many people live there, whether just one person or 10. All that is tracked is the rent in that housing unit over time.
You shouldn’t spread that kind of toxic BS about CPI when you don’t know what you’re talking about.
And yet, and yet, Gavin is predicted (by Doomberg) to follow Trump into the Oval Office!!!!
It’s tough trying to make affordable housing. I’ve always thought there were 2 kinds of inflation, the regular kind and government imposed inflation. The regular kind has driven up prices and they aren’t readily coming dow, but the insidious government imposed inflation is going up steadily. Development fees skyrocketing, environmental building practices driving up costs, and crazy connection costs for services. Not sure what the answer is
God no…..can the other side actually put up someone decent and will actually fight for general people’s interest? Yeah I know…pipe dream…
@Phoenix_Ikki sadly it is a “pipe dream” since until “general people” give more money than ‘billionaires and corporations” (that won’t ever happen) politicians (from BOTH major parties) will keep working for the people that pay them (I have been self-employed for decades and every year it gets harder and harder since people like me don’t pay the politicians to make it harder for big companies while every year big companies pay to make it harder for small business competition.
What are you talking about? AOC raised exactly zero dollars from billionares. Her donations are all small donations from “general people” and she sets fund raising records.
If you notice that a particular candidate is getting significant funding from billionaires and not from “general people” but you think that candidate is the one to best reprsent “general people,” its probably your voting theses that needs re-examined.
Assuming rational market actors (which can certain be debated), the fundraising profile of a candidate tells you much about them.
I seriously doubt it. The uniparty has had way too many chances to get it right yet they never go to the root of the problem probably because they dont care about immorally making money off the problem. The voters have to stop rewarding bad behavior. Only choice for balanced budget is Libertarian, and they too are only as good as their actions, not their words. You cant blame the young voters as they havent experienced life much. I naively voted for the uniparty when I was young too. But the older voters have had time to evaluate things.
They are all the same – Keynesian asset price pumpers.
Wow! CA lost 200,000 population in 6 years. At this rate they would fall behind second place Texas in a mere 300 years.
jr, I only have a 9th grade education so I’m probably mistaken but using the last YOY delta won’t Texas’ population catch California in 25 years?
The commenta generated by Wolf’s observations consistently seem long on complaints but short on solutions, don’t they?
What’s the root cause of today’s affordability problem vis a vis 2012?
Is it simply high prices? Or are there ancillary factors at play? Like interest rates? Or the higher property taxes? Or falling household real incomes?
And what’s the solution? Any one got one to offer? Would electing Harris/Walz instead of Trump/Vance made any difference? I don’t know? Fo you? Does anyone?
I’m listening but all I have heard so far is the faint echoes of Walt Kelly, “we have met the enrmy, and they are us”.
High mortgage rates are a classic solution to high prices. More new supply and less population growth are also solutions. If combined, those three solutions would work pretty well.
And we’ve been saying this here for a long time, you just might have missed it.
Hi Wolf, Posing the points as questions is a debater’s device. As one of the two Out of 20+) bosses I worked for on the Slope that had Infantry School leadership qualities emphasized, never ask a question in a public forum unless you already know the answer.
Of course you have mentioned those points in your discussions and first and foremost your writings are those of an instructor. And in part my comments are meant to reinforce the lessons you’ve shared.
Two final observations; the bumper sticker logic often on display here is likely to generate a response on occasion and I should have mentioned productivity.
The other good boss during our annual reviews asked everyone if they’d been more productive in the past year, The other twelve folks were stumped but not me.
My reply? Of course I’m much more productive, I’m doing the same things as last year but faster and with less effort. And darned if I didn’t get that year’s extra 5% as a contributor reward.
Which reminds me, it’s time to send you yours. Maybe it won’t bounce this year.
You are missing two key factors in the supply equation. One the number of single person households continues to rise as a percentage of all households. This means same population needs more housing. Second, the total population included young persons in high school and college. Alot of them and they keep graduating for the next 6-7 years and getting jobs and becoming households. Same population needs more housing. Both of these will continue to pressure CA housing prices because demand will exceed supply. For quite some time.
That’s not how it works. What matters is the average number of persons per household. That’s the only thing that matters. You might have some more single households and some more larger households, such as multi-generational households (that’s a thing now).
CA has 2.84 persons per household now. In 2022, it had 2.85 persons per household. So it’s coming down very slowly, about 1/10th of a percent per year over those three years.
There are 13.55 million households in CA. An annual increase of 1/10th of 1% = 13,548 housing units needed in total to accommodate all your points. But California built 125,000 new housing units last year.
Uh, did you miss the part where Texas gained over 2.5 million during that same 5 year time period? If the figures stay the same, Texas will have a larger population than California by around 2040. Now, I’m not sure Texas will grow that fast for the next 14 years, but I would also bet that California will lose a higher rate of people over the nest 14 years, so I wouldn’t be surprised if Texas is the most populous state in 2040.
If housing comes down in price then people would flock right back. The climate and income is unbeatable… although the traffic fucking sucks
Texans are going to revolt if 10 million more people move into the state over the next 10 years. The “Texas Miracle” was great for a while, but people are getting squeezed now.
Traffic in Texas metros are a horror story too. A little better than Calis, but not enough to want to live there.
Maybe so, maybe no Wolf:
Texas is much larger land area than California, and does not have half the guvmint restrictions on development from what I read…
IF and only IF Texas can find the way to convert the solar heat/energy there to usable energy and water, there is just SO much empty land there that it will be easy to accommodate many millions of people.
Definitely going to be fun to watch the demographic changes in the next few decades!!!
But, in the end, Texas has a lot more developable land – so long as more reasonable temperature/humidity desires are held.
Few places on Earth have the “perfect” Southern California climate (which is really only a *coastal* Southern California climate – the 65+% inland is…desert).
So you have tens and tens of millions packed into coastal enclaves – driving housing prices through the roof and creating all sorts of “necessary” political pathologies to try and make the population-density engorgement “work”.
Texas weather isn’t perfect (although for 75% of the state, snow is largely unknown) but the reasonable/viable environment percentage of the state is likely higher than that of California.
And Texas can be humid – like most of the other 48 states that aren’t California.
But people talk as though living anywhere but Southern California is somehow akin to living on the Sun.
And, yet, even with California engorgement, 88% of the US population *don’t* live there…and somehow fail to spontaneously combust or freeze to death.
*Especially* when cost factors are taken into consideration.
(Especially historically, although recent TX housing inflation may be backing off some…due to increased supply…due to greater availability of “viable” buildable land).
Lots of room in DFW to expand. Can build north all the way to Oklahoma, which they’re doing now. Major employment centers outside of downtown Dallas (AT&T is moving its HQs from downtown Dallas to Plano) and Ft Worth, and growing. Yes, the cost of housing is no longer the bargain it was 10 years ago, and some of the people will go to Tennessee or Mississippi or the Carolinas because of that. Yes, Texas is hot in the summer, but apartment complexes all have pools, as do most mid-cost homes and up. Being able to wear shorts and flip-flops for 6-8 months of the year is great, and it is also easy to do with young kids (don’t have to bundle them up in 4 layers before going outside). Yes, Texas traffic can be a pain, but not as bad as LA or SF. Indeed, from where I live, I can drive the same 30-35 minutes (17 miles) to downtown during morning rush hour as it took 30 years ago.
I do think the crackdown on immigration, if continued past Trump, will slow the Texas growth rate, as I indicated above, as will the rising cost of homes (but as the data you put out shows, prices are decreasing in many major metros in Texas). So, my crystal ball says growth in Texas will slow compared to the prior decade, but still go up substantially.
Trying to boil it down…
Texas v. California (weather and cost-wise at least).
80% as “perfect” for 40% of the cost (used to be 25% of the CA cost…and hopefully might be again).
The exact same trade-off analysis can be done for…anywhere.
I say this in 9 degree Washington, DC, looking at 16 inches of hard frozen snow covering…everything. (Send…H…E…L…P…)
(I have to admit that one lane plowing happened within 48 hours and at least the interstates are apparently clear)
(How in the hell do Chicago, NYC, and Boston even function in the winter?)
We’re revolting now. Texas is full.
Honest question, where does the water come from for Texas? Or rather, are they on track to start running out, particularly if they continue to get more immigration?
Seems like folks are starting to use it up at a rather alarming rate in large parts of the country…
Water is a huge issue in Texas from time to time. But it is in many parts of the US. Much of the US is semi-arid or desert. California too has mega-issues with water.
Demographic forecasts indicate that Texas (TX) is projected to surpass California (CA) in population sometime in the mid-2040s, with several recent analyses pointing to around 2045.
Key projections include:
• A 2025 report from Realtor.com (based on Census data and trends) forecasts Texas reaching nearly 42 million by 2045, overtaking California as the most populous state that year. This has been cited in sources like Newsweek, KXAN, and GlobeSt.
• Older estimates (from around 2023–2024) from state demographers and analysts pointed to around 2050, but more recent trends have accelerated the timeline in some forecasts.
• Official state-level projections
It’s my perception with births, deaths and deportation that population is declining all over the country.
California is a pretty state, i would be happy to have a home there someday.
Hot of the presses Trump said we will get fed chair name tomorrow. I think Kevin Warsh will be named, not because he is competent(he is) and experienced with 2009 melt down being the liaison between WS banks and Ben Bernanke. But because Kevin’s father in law is Ronald Lauder , his company recently has the mineral rights to Ukraine awarded to him from DJT. Back in the first term (“Trump called me down to the Oval Office,” John Bolton, national security adviser in 2018, told the Guardian. “He said a prominent businessman had just suggested the US buy Greenland.” The businessman, Bolton learned, was Ronald Lauder. Heir to a makeup fortune – the global cosmetics brand Estée Lauder – he had known Trump, a fellow wealthy New Yorker, for more than 60 years.) ~Kevin Warsh is my guess for reasons above and is a reason the $usd is selling!. Its all about the profits controlling the mineral rights in Greenland! we traded our friends in Europe for potential profits, UgH!
“Kevin” about says that Warsh is a “hawk”.
I have not idea, but it looks like there is some disagreement here.
“They choose friction’: Tillis flexes on Trump Fed pick Warsh”~semafor~ Kevin may not make it!!! Bravo to senator Tillis for not riding on the back seat of the Harley Davidson like the rest of party. Balance of power is the American way!
Doesn’t more supply of empty houses lower cost in theory? Unfortunately net migration is increasing in Oregon and we already have some of the highest homeless per capita in the country. Welcome to Oregon, no go home is our motto.
@Jdavis empty houses will only lower rents if all the owners of empty homes are trying to rent them or sell them. I’m going to be 65 soon and my parents in their 90’s are both still alive and doing OK (Dad bounced back from a stroke in his 80’s), but I have a bunch of friends my age with one parent dead and the other in assisted living and their childhood home sitting empty waiting for the parent to die so they get the stepped up basis and can sell the place tax free.
Love that stepped up basis. It’s the only way to beat inflation taxation in real estate.
The stepped up basis upon death should be eliminated, along with the estate tax.
A person dying should have no impact on taxes, one way or another.
“Love that stepped up basis”
Except, of course, see comment *immediately above*.
I can confirm that there is a lot of housing supply in Southern California if you’re in the market for a $4 million dollar plus home. If you’re looking for a house (not condo) under $2 million then fuggedaboutit.
10M+ home sales are booming though. See WSJ article.
Los Angeles led the surge, posting a 54% increase in $10M+ sales and a 61% rise in dollar volume, helped by seller capitulation on the mansion tax and wildfire‑related displacement.
Silicon Valley and San Francisco rebounded sharply, driven by AI‑era wealth and tech‑stock gains, with $10M+ sales up 36% and 50%, respectively.
you’re manipulating what the WSJ article said.
1. It said there were 292 homes that sold in all of 2025 in Los Angeles County at $10 million or more: just two-hundred-and-ninety-two homes sold in an entire year in the gigantic housing market with a population of over 10 million people. MINUSCULE sales numbers.
Same manipulative BS in your line about Silicon Valley.
2. Because these sales numbers are so minuscule, they’re very volatile, one year up by 50 sales, which is a huge percentage jump, next year down by 50. And they did plunge in percentage terms in the prior two years, as you can see in the chart, if you’re smart enough to calculate a percentage difference.
3. In all of the markets that the article cited, including the largest markets in the US, such as LA County, Manhattan, Southwest Florida, etc., only 1,660 homes of $10 million or more were sold in all of 2025.
And the WSJ article said:
“In some cases, activity picked up when prices came down.”
It cited the story of a guy who bought a home for $9 million in 2025, after it had been on the market since 2022, initially for $15 million, and after numerous price cuts was discounted by $6 million.
Do you think I cannot read the WSJ?
It seems like CA coastal areas are filled with landowners the benefitted from inherited low property tax basis. They have less need to sell. Maybe their kids will.
I generally like prop 13 – for the original owner and residential only. You inherit a house and can’t afford the taxes? Sell it. Talk about 1st world problems
Indeed. The only reason I still maintain property there is because now it pays for itself and generates a small profit, but it wasn’t always that way. Californians are the greatest hypocrites in the world. Having said that, I enjoy an annual surf trip, but don’t engage much with the people.
@Gaston CA Prop 19 in 2020 ended 99% of people from inheriting the low Prop 13 tax basis of property they inherit. The proposition was funded by realtors and it has worked as planned forcing many people I know to sell family vacation homes and other family property when massive increase in property tax kills the ability for the peoprty to have positive cash flow as short term rental (STR) and even kill the cash flow on some long term rentals…
“The government wants a larger population in order to collect more taxes to pay for its promises and pet projects, but the people that are already here?”
Again, agree…but this was the exact sort of thing that got commenters yelled at just a few years ago.
And, there is a semi-related macro metric that has historically shared a similar fate – deflation vs. inflation.
Circa 2001-2002 there was a *ton* of MSM output about how “deflation” was the absolute devil and harbinger of the Apocalypse – and that government “policy” (read ZIRP and housing *inflation*) was an absolute necessity.
20 years of very troubled economic history followed.
There is definitely a powerful “maximalist” faction in this country whose (likely financial) interests are served by *perpetually* trying to keep the pedal-to-the-floor in terms of “growth” – even if said “growth” is trillions of dollars worth of “bridges to nowhere”/”forever wars without a plan”/”human trafficking in the millions”.
The very concept of allowing the economy to take a breath and re-evaluate (say, asset valuations…or any DC policy…) with an eye to returning to greater growth a bit down the road (after more consideration) has been treated as dangerous and anathema.
Even as Rome created a self-defeating ecosystem where perpetual foreign invasions were required to acquire plunder to fund the increased legions to defend the perpetually engorged Empire (until imperial over-stretch led to perpetual civil war and eventual collapse) the “maximalist” US policies have failed this country.
But they still keep lobbying…
Better than ”good” IMVHO cas, this a really great addition to the/our commentaria here on Wolf’s Wonder…
thank you
Thanks…it is nice to get positive feedback.
And I appreciate your comments too VintageVNvet (from your handle, I might assume that you have experienced the limits of American wisdom/power first hand).
Lots to comment on in this article. Firstly, while I know many here (and everywhere in financial commentary) hope for a Housing Crash II to being prices back down, I continue to believe that flat prices for a long time will do the trick just the same. If California is back to 2022 prices then that’s four years of “expected equity” that never happened. Add eight or twelve years more to that and the whole get rich on housing scheme really falls apart. Houses are still selling but it’s a slow grind and it could take a couple decades to undo the damage done by inflation and Fed MBS meddling to get everything back to where it should be. Imagine if houses change hands for the same actual dollars in 2036 that they sold for in 2022? There may be regional drops but I do not think we’ll see the national 50% off sale like we did in 2010.
California would be a great place to live if you were stupid rich and didn’t care about costs, or beach bum poor and lived in a ground floor studio a mile from the coast and worked as a bartender within walking distance. Trying to be middle class and buy a house and commute in a newer car is becoming financially impossible there.
When I visit California I always come away thinking that the high density and costs seem more like some Asian places than Texas or Missouri or Virginia. What if ten million wealthy Asians are invited to immigrate here (for a fee) and most of them end up in Seattle, SF, and LA? I can imagine California’s population at 1/3 Hispanic, 1/3 Asian, and 1/3 everyone else in the not too distant future.
Working in SoCal in ’17, it was already SO clearly the one thirds you suggest might happen, that I did not try to stay too long in spite of my employers desire….
Not going to claim any special knowledge, but did live there for couple years and absolutely enjoyed it after discharge from USN in middle ’60s…
Was a really wonderful place for a young person to be those days…
VintageVNvet,
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Why does it matter the race or ethnicity of your neighbors? Productive responsible caring members of society and that they pay taxes is all that matters!
Yes…in addition to respect the custom and culture of the USA. They come here to be “Americans”. I always believe in what Teddy Roosevelt said:
“In the first place, we should insist that if the immigrant who comes here in good faith becomes an American and assimilates himself to us, he shall be treated on an exact equality with everyone else, for it is an outrage to discriminate against any such man because of creed, or birthplace, or origin. But this is predicated upon the person’s becoming in every facet an American, and nothing but an American…There can be no divided allegiance here. Any man who says he is an American, but something else also, isn’t an American at all. We have room for but one flag, the American flag… We have room for but one language here, and that is the English language… and we have room for but one sole loyalty and that is a loyalty to the American people.”
Interesting nationalistic quote from a President whose policies led to significant displacement and suffering of native Americans. I guess immigrants were fine, just not natives.
“California would be a great place to live if you were stupid rich and didn’t care about costs of living”
See also, NYC…
“seem more like some Asian places than Texas or Missouri or”
See also, original Blade Runner movie…
(And, that said, at least some Asian hyper-dense areas are a *lot* better run than some CA areas…)
MICROSOFT STOCK LOSES $357 BILLION — IN SINGLE DAY…
Microsoft shares slid about 10% on Thursday following an earnings report that disappointed some investors, prompting the stock’s sharpest daily decline since March 2020.
The move trimmed the technology company’s market cap by $357 billion, leaving it at $3.22 trillion by the end of Thursday trading.
“California would be a great place to live if you were stupid rich and didn’t care about costs, or beach bum poor and lived in a ground floor studio a mile from the coast and worked as a bartender within walking distance.”
And that effect is what is happening in Texas, and FL (though it was always poor) and other states in this list.
Soon enough basically, only politicians will be “wealthy” in the US. That groundwork is being laid out now. The young workers who in many cases no longer really buy into getting ahead maybe unconsciously foretelling it too.
I always wanted to be a beach bum bartender. Looks like I might have to go-to Florida now though.
Huge surge in gold and silver is about to end and metals will plunge 50%, warns former JPMorgan expert
Silver surging alongside gold has brought out naysayers lwho can’t see the price skyrocketing for much longer.
I think prisoner exchange migration would be great, my wife and I would like to discuss a swap for a northern European country, get in touch.
As for the market thinking warsh is a hawk. Bwahaha. If Trump nominated him he’s not a hawk, not anymore. Maybe his whole identity is self promotion through contrary positions? Or more likely ideology informed hot takes? More likely.
Trump picks inflation hawk to run the Fed – here’s what it means for YOUR wallet
Trump chooses ‘central casting’ Kevin Warsh for Fed Chair
President Donald Trump made the announcement in a highly-anticipated move to replace Jerome Powell.
Stock indexes trade lower as Warsh wins Trump nod for Fed chair. Long-term Treasury yields rise. Gold and silver slump.
SPX -0.48% GC00 -6.01% SI00 -16.49% BX:TMUBMUSD10Y 4.253%
MW: Wholesale prices rise sharply and show new Fed chief could confront stubborn inflation
Gold has now plummeted a record $350 per ounce today which is 10 times what a whole ounce used to cost! I called JTV Gold Exchange this morning and requested a gold exchange package and have a load of that stuff ready to stuff in it as soon I get my prepaid label and box and sure hope it doesn’t drop to $20 per pound by the time they receive my exchange box!
Hahahahahahahah! Like I SAID. This POTUS will absolutely NOT doe ANYTHING to harm property owners or sellers! I am BUYING home builders stocks for the next 3 years. Please folks, when it is obvious do NOT question it!
Panic hits Americans who piled into ‘safe haven’ gold and silver as prices suddenly crash
After soaring to record highs this week, gold and silver plunged this morning in a blow to everyday investors who had piled into the precious metals this year.
Yeah it PLUNGED to where it was back when the dinosaurs roamed the earth…8 days ago.
Wolf, do you know of a source for data indicating on a year-by-year basis the number of homes in CA that are not owner-occupied (better yet if there’s such data that segregates long-term rentals from that number)? An increase in STR’s and vacation homes (i.e., homes that sit vacant most of the year) seems to be the real source of the “housing shortage” at least where I am (San Diego).
For example: the Voice of San Diego published a piece this week (Jan. 28) indicating there are at least 4,996 vacation homes in SD without a full-time resident and that aren’t even being used as an STR. And there are an additional 5,648 STR’s on the market. According to the article, each of these figures would account for roughly 1% of the city’s total housing stock.
But what I’ve not been able to find is this same data on a year-by-year basis. I suspect the data will show a pronounced increase during the “pandemic era” housing market, when rock-bottom interest rates triggered a speculative frenzy in local real estate.
If I could find it, I’d like to present this data to local officials who seem intent on addressing high housing prices through means (e.g., imposing a massive ~5% transfer tax) that I’m afraid will only make things worse instead of what seem like common sense ways to make it better (e.g., chasing STR’s out of town and taxing unoccupied homes to oblivion).
San Diego.gov list 8220 licenses/homes for Short term rentals.
https://data.sandiego.gov/datasets/stro-licenses/
One can also report violation here: https://getitdone.sandiego.gov/TSWNewReport?type=STRO%20Violation
If you cannot buy or rent a home no matter how much money you’re willing to pay, THAT’s a shortage.
But if there are lots of homes available to buy and rent, which there are, but they cost more than you want to or can pay, that’s not a shortage. That’s too-high prices.
Exactly. Hence the mock-quotes around “housing shortage.”
SILVER DROPS 30%…
@shangtr0n did the Voice of San Diego say how they were able to find out that “there are at least 4,996 vacation homes in SD without a full-time resident”? I have a friend with a second home in SD (a place with a roof deck in PB) and since he does not rent it (and have any kind of STR permit) there is no way to know it is a second home without a full-time resident. In the past I have seen articles pull every home that has a tax bill sent somewhere else and assume that it is a rental or second home when many people send there home tax bills to their office or to a CPA.
Yes, sort of. Quoting from the article here: “The list of vacation homes, created by Councilmember Sean Elo-Rivera’s office, is based on residences which claimed excemption from the rental unit business tax.”
So, they presumably took a list of homes that are designated as not primary residences and then removed from that list those that didnt’ claim the rental unit business tax exemption.
Anyone who knows the statistics of foreigners who own houses in America?
Let say the elites of any dictatorial country buying up properties in America to rent out or it is a way to “lauder money” out of their countries.
Probably fewer than wealthy Americans buying houses overseas or in other investments to hide money. But you can easily Google percent of homes owned by foreigners.
This is not ownership, but purchases by resident foreign buyers and non-resident foreign buyers. Those purchases have collapsed since 2017:
Retirement to Florida in the future? What say you?
Not sure I like the weather. Maine sounds like better deal because I can handle the snow/cold.
That fungible commodity known as gold is having its most amazing and exciting day in its short history of trading as a commodity for floating value and has plunged $587.00 an ounce this morning! Just to think a whole ounce used to be $35.00 and the current official US government price of gold has stayed perfectly stables at $42.42 per ounce!
What is the purpose of $42 an ounce if the govt won’t sell and can’t buy for that price. It’s a good reminder I guess of when the country was fiscally sane and stable.
MW: Kevin Warsh is Trump’s Fed pick. Thom Tillis, a retiring Senate Republican, signals he will hold up confirmation.
I came to California in 1997 at age 26 with everything I owned in the back of my geo metro. If anyone has a right to complain it’s me.
I’m taking my whole family out of California in 2027. We are going to South Dakota.
California, silicon valley, Hollywood, have wrecked themselves & for what? Why did Nero burn down Rome?
What the elites in California are doing is malpractice. Texas is the main winner in California’s economic destruction.
I agree with you, but the people who made it good were the Okies. They got a chance to buy low.
As a Florida native, we say we love you vacationers. Please come enjoy our beaches, theme parks, top rated restaurants.
But please don’t move here. Please.
above cas127 asks @ Jan 30, 2026 at 11:57 am
“How in the hell do(es) Chicago … even function in the winter?”
Lots of snow plows and salt.
If you’re lucky enough to be retired you stay at home and eat pizza and drink beer.
Central Texas has been in a pretty substantial multi year drought so anyone wanting to move here might want to go to the eastern part where there is a little more water. In the central part, lots of trees have died, all the grass is brown, the reservoirs have dramatically lowered, some almost dry, the rivers and streams, which were never big to begin with are even lower and slower/stagnant, your car is dirty again a few days after washing due to all the dust, water use is being rightfully restricted due to people carelessly watering their yards in a drought, water bills are expensive, all of which are exacerbated by the extreme summer heat. So beware if thinking about moving here. Prayers for rain.