Jeff Collins staff writer for the Orange County Register writes that “Stiff competition for an insufficient supply of houses prevented Max and Taryn McCann with their three dogs from buying a home in downtown Fullerton, last year.”
They have a budget of $360,000, but there are few houses in their price range, so they’re on to Plan B: Find a duplex to share with Taryn’s brother and his fiancée.
“Our purchase power together is in the high $600,000s,” she said. “But finding a two-house unit is also not that easy.”
One underlying factor relentlessly dogs the market: Homebuilding can’t keep up with demand, creating a shortfall that pushes rents and prices ever skyward.
How bad is the shortage? Experts estimate that Orange County has a shortfall of 30,000 to 60,000 housing units. The population in Orange County in 1990 was 2,410,668 with 875,105 housing units. Since then, the population has increased 29.2% to 3,113,991, yet housing units have increased only 21.5% to 1,062,966.
It is not just Orange County with a shortage of housing. A recent article in Simi Valley Acorn said, “Because the economy has improved and prices are rising, residents once again find it difficult to buy homes in the area. Those who can’t buy, rent, but repeated studies have shown that even rents are now beyond the reach of the average wage earner.”
There are several reasons for the shortage. Wages have not kept up with the rising prices of housing. A look at five decades’ worth of government wage data shows for most U.S. workers, real wages — that is, after inflation is taken into account — have been flat or even falling for decades…”
Another reason for a housing shortage: we have “barriers to entry” as a major reason for high housing costs and high rents. “All builders face “barriers to entry” when they pursue a project. Among their biggest obstacles when building housing units… are the high development fees and other demands on construction imposed by city governments.
At this rate only the very rich will be able afford housing.