Factors influencing the current situation that are particularly Californian in nature can typically be traced back to a general scarcity of land in desirable locations. The cost of undeveloped land is prohibitively high, especially within the Los Angeles and San Francisco areas. Kenny Slaught notes regular delays in construction of new projects, which results in many owners electing to stay put and renovate. This is partly because Proposition 13, the 1978 amendment to the state’s constitution, made relocating a daunting task for many. Though the law states that future property tax increases are capped at 2% based on 1975 assessments, a major exception takes place when a sale is completed, and a property is reassessed based on its current sale price. Ultimately, yearly totals are decided by purchase figures which vary monthly, as demand in California shifts with the seasons (the most homes are moved in June and a small increase at year’s end). Also affecting yearly totals are, interest rates, asking prices consumer confidence, negative equity status, quantity and quality of homebuyer jobs, disposable income, saving rates, and elements like major foreign investments.
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