A supply shortage built up over years of underbuilding, held in place by cost, land, and regulation. And don't hold your breath for a surplus. Three forces keep the shortage going: - The cost to break ground. Before a shovel touches dirt, a California builder faces steep permits and fees. Josh has cited figures around $90,000 per home, though the amount varies widely by jurisdiction and changes over time. Costs like that make lower-margin, entry-level construction especially hard to pencil. - Land. Buildable land in the desirable, established areas is genuinely scarce, which pushes development to the outskirts where fewer people have historically wanted to live. Nobody can manufacture more coastline or more close-in lots. - Regulation. California's environmental review, including coastal-commission oversight, adds cost and delay on top of everything else, sometimes in areas that wouldn't strike you as environmentally sensitive. As for a surplus: a true oversupply of California housing hasn't appeared since the 2007 to 2009 stretch, and producing one would take a very large amount of sustained building against all the friction above. That's neither a fast nor a likely turn. For a buyer, the practical implication is that structural scarcity tends to support values over the long run, so time in the market usually beats waiting for a flood of supply that may never come.