Part of it has to do where the good jobs are, and where they’re not.
According to Robert Bernard Reich, demand is overtaking supply in hot jobs markets, and supply often exceeds demand where good jobs are lacking.
But another growing factor is wealthy foreign investors looking for places to park their piles of money. China’s elite has been buying up real estate in Seattle, San Francisco, and New York (as well as Sydney and London) because they’re great investments. So too with billionaires from Saudi Arabia and Russia.
So here’s the question: Should foreigners be allowed to buy up American real estate? While global investments in factories, equipment, and research arguably improve economies where they’re made, global investments in real estate don’t necessarily help – particularly in cities where supply is limited. Their effect is mainly to drive up prices and make it harder for many Americans to afford homes. (Donald Trump, xenophobic about almost everything else, is in favor of foreign purchases of U.S. real estate because such purchases enrich real estate moguls like Trump.)