What happened
A recent study by Clever Real Estate found that home prices in California have increased significantly since 1984, with some areas seeing prices triple. The study compared current median home prices to what they would be if prices had kept pace with inflation since 1984.
According to the study, home prices have grown 441% since 1984, while inflation has only grown 210%. This means that the median home price would be $242,309 today if it had kept pace with inflation, rather than the current $423,100 nationwide.
The largest gaps between home prices and inflation were found in California cities, including San Jose, San Diego, Los Angeles, and San Francisco. For example, a home in San Jose would cost $642,288 if prices had followed inflation, but it currently costs $1,375,000, a difference of $732,712.
The study also found that home prices have tripled in 13 of the 50 largest metros since 2011, including Riverside, Fresno, and Sacramento. However, in the past year, housing prices in 27 of the 50 metros have begun to trail inflation, with home prices rising 1.4% compared to a 2.4% increase in inflation.
