Irony is that if Cali curtailed its absurd zoning laws and codes those single family houses would be worth 100x more overnight once developers can replace them with 50 stories of condos. If most of Cali rezoned a hundred billion dollars of development capital would flood the state and leave all the NIMBYs incredibly rich.
The only case where property values would drop is if you were in an area that exists unnaturally due to how low density the city core is. The trick is though if California ever fixed this problem the immense influx of capital investment, job creation, and migration pressure since the economy would be kicked into overdrive would drive those property values back up and way higher than the currently crippled density environment can allow. It might take longer than some owners are comfortable with (ie, decades) but considering how much growth Cali sees while stabbing itself in its own foot I'd imagine almost any currently developed and commutable single family home in any major metro area of the state would be worth twice what it is now in 30 years (adjusted for inflation) if they allowed unlimited building because the manic development you would see would drive density up in all directions of city cores for miles around each year.
Your argument makes sense. I wonder what the carrying capacity for California is. The once excellent drinking water in San Francisco is now foul as the pristine Hetch Hetchy source is diluted with ground water to compensate for diversion to neighboring towns.
The only case where property values would drop is if you were in an area that exists unnaturally due to how low density the city core is. The trick is though if California ever fixed this problem the immense influx of capital investment, job creation, and migration pressure since the economy would be kicked into overdrive would drive those property values back up and way higher than the currently crippled density environment can allow. It might take longer than some owners are comfortable with (ie, decades) but considering how much growth Cali sees while stabbing itself in its own foot I'd imagine almost any currently developed and commutable single family home in any major metro area of the state would be worth twice what it is now in 30 years (adjusted for inflation) if they allowed unlimited building because the manic development you would see would drive density up in all directions of city cores for miles around each year.