Demographic changes are being ignored in housing market analysis

The last 3 years have seen very high run ups in housing prices. The trend that I think many housing market analysts are ignoring is immigration and general demographic shifts. The fact is, housing appreciation in California was lagging the rest of the country during almost all of the 90's while immigrants came pouring in. Over the last 3 years some of the non-California high appreciation areas like Las Vegas NV and Cape Coral FL had a 25-44 yr old population increases above 40%. 40%!! Even with the giant increase in speculative construction we have seen in Las Vegas, the total inventory has not increased 40% (PWC's estimate is 18%).

I am not going to say that California prices will continue to climb or even remain flat. I am going to say that immigration and demographic analysis over the last 15 years holds the answer.