Could our historically low interest rates and historically high house prices have some other connection besides the obvious one that the former causes the latter? Could they both be driven by some underlying problem with the world economy? (@ATabarrok, @EconTalker?)
That would have been due to the rise of Silicon Valley. That explains the rise of house prices in the Bay Area, but presumably not in many other places.
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California was the place where property owners figured out they could collectively act to lower supply for the sole reason of raising their own property values.
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What did they do? California has been building suburbs like crazy for decades
End of conversation
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Berlin and London face the same problem with respect to the rest of their counties don’t they?
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