Question:
“Prices in San Diego are much too high. We’ve got to do something since it’s gotten to the point where no one can afford a home here.”
Answer:
I appreciate your frustration. San Diego home prices are amongst the highest in the nation.
So while I don’t disagree with you, I feel compelled to address a fallacy I’ve heard many people express.
That fallacy is: “Prices have gotten so high that no one can buy a home.”
This contradicts basic economic theory.
If prices actually got to the point where no one could buy a home, they would by necessity drop until they reached a point where people could buy a home. That’s how free markets work.
So, while San Diego home prices are indeed high, homes are selling every day.
