I’m avoiding my neighbor.  He’s a real estate appraiser, which means he delivers more bad news than Standard & Poors.  Besides, I just don’t want to know what’s happened to the equity of the California dream house we bought 20 years ago. Denial is our friend.

So you’d think with how tanked the California economy is, that housing affordability in the Tarnished State would be increasing, right? Wrong, according to a news release today from the California Building Industry Association:

Housing affordability in California decreased in the second quarter of 2011 as 16 of the state’s 28 metropolitan areas included in the report showed declines, the California Building Industry Association announced today.

On a statewide basis, the HOI found that a family earning the median income could have afforded 61.3 percent of the new and existing homes that were sold during the second quarter of 2011, down from 64.6 percent in the first quarter.

In a normal economy, the guy with the median income would be able to buy 50 percent of the homes on the market, but what’s normal about California’s economy? Primarily to blame for the continuing lack of affordability is the willful ignoring of the recession by California’s regulatory agencies, which continue to manufacture new burdens with an output on a par with what California manufacturers used to achieve … before they fled screaming from the state.

Regulatory over-zealousness inflates the selling prices all over California, with San Francisco being the worst, with a regulatory cost premium of $400,000 per home. Did you expect anything else?  Liberalism, after all, costs money.  Don’t be surprised, then, to learn that San Mateo and Marin counties, just south and north of San Francisco, respectively, track right behind Nancy Pelosi’s haunting grounds.

I’m covering this topic extensively in the “Worst for Business” chapter of Crazifornia.  Good Lord, there’s a lot to write about!

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