Most Americans know that to live on the coast, either East or West, is generally more expensive than the middle of the country. While admittedly a generalization, this discrepancy is even more pronounced when looking at prime locations like Los Angeles, Manhattan, and San Francisco. The difference is also apparent in other expensive territories like San Diego and Orange County. However, it hasn’t always been this way.

While California generally outpaced the market, the difference became more pronounced in the 1970’s, and since then the schism has grown tremendously. According to the California Legislative Analyst’s office, between 1970 and 1980 California’s prices went from outpacing the market by 30% to 80%. This tremendous jump in just 10 years has been followed up by even more extensive growth. According to the office, “today an average California home costs $440,000, about two–and–a–half times the average national home price ($180,000). Also, California’s average monthly rent is about $1,240, 50 percent higher than the rest of the country ($840 per month).”

These numbers are propped up by a meteoric climb in real estate values in Northern California as the tech boom continues, but the rest of the state also contributes to the sizable difference.

There are a lot of competing theories regarding the reasons for the high prices. For one, demand outpaces supply. While an incredible amount of people want to live in California, the amount of building that is taking place cannot keep pace.

The catalyst is that living on the coast means living in an incredibly desirable location. With geographic and physical limits on how much one can build, people then look to the interior of California. An influx of individuals to the inland, props up prices to higher levels than that of similar terrain makeups in other parts of the country. The proximity to the coast contributes to this significantly.

The weather is another contributing factor. Some deem this the Rose Bowl effect, individuals all across the country tune into the Rose Bowl on New Years Day and see sunny Los Angeles poking out from behind the stadium in Pasadena. Compared to relatively dreary surroundings in inclement areas of the United States, California looks even more appealing in the middle of winter. Studies on this phenomenon lack, and it might be more anecdotal and urban legend than statistically valid, but it encapsulates the feeling regarding California.

The lore is further built up by Hollywood and the movie and music industry as well as Northern California’s incredible technology hub. All of these features are added perks of living in California and such traits help drive up prices and demand. No one individual factor may be the reason, but combining beachfront property and years of reverence for “California Dreamin,” seems to be a potent recipe for sky high prices.

This begs the question if California real estate will ever fall back to earth. By simple supply and demand, it doesn’t seem to be the case. Of course, individuals’ tastes and preferences may always change, but it doesn’t seem that this type of house will go out of style anytime soon.