California, USA's high housing prices have always been a concern for investors. Recently, the California Department of Housing and Community Development released a new report that finally clarifies the reasons behind the high housing prices in California!
The report indicates that California builds an average of 80,000 new homes each year, which is far below the demand. By 2025, California will need more than 1.8 million new homes to keep up with the continuously growing population.
Currently, California has 39 million residents living in 13 million households, spread across 58 counties and 482 cities. By 2050, California's population is expected to reach 50 million, with nearly 40% of residents living in Southern California. To accommodate the population surge in Southern California, an additional 68,000 new homes must be built each year.
The reason for the housing shortage in California is the lack of available land.
Additionally, some developers point out that the housing shortage in California is related to the California Environmental Quality Act. This act requires state and local agencies to assess whether development projects will have significant environmental impacts, and the approval process can take years to complete. By the time the plans are approved, the peak period for real estate may have already passed.
The housing shortage has caused prices to soar. According to the latest data from relevant agencies, the median home price in Azusa last September was $449,250, an increase of nearly 20% from $375,000 in the same period of 2015. In some cities, the price increases are even more significant, such as a 26.9% increase in Foothill Ranch, a 25% increase in Westlake, and a 20.4% increase in Chino Hills.
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