[F32Fleet]

#1 Size. In 1970 avg size was 1500 sq ft vs 2600 sqft in 2017.

#2 Rising household incomes as more wives remain in the workforce.

#3 Suburban expansion allowed larger house per lot.

#4 Monetary policy from The Federal Reserve artificially reduces the cost of money by lowering mortgage rates. People can spend more money on a house rather than interest. It also encourages large investors (ex REITS) to buy real estate and forces the public to invest in equities which drive up stock prices (See #5)

#5 Fiscal policy: Local/State tax policy (Prop 13), Capital Gains Taxes.

#6 Globalization. Buyers are competing against an international pool. This pool by being larger will have more individuals willing to pay whatever price. In addition the international pool values multi-generational households and combines* their wealth in order to outbid domestic buyers.

*Ex Chinese buyers on West Coast will place large down payments on real estate. The down payments are provided via "gifts" from "relatives" living in Mainland China. It's not uncommon to see gifts totaling $100k-$300k. Of course this is how US dollars come back and are re-invested in the US economy. Not necessarily a bad thing.