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Are my housing prices/taxes more influenced by the $40M beach house a few miles away from my home or those in the lower-class well beyond my county line?

Assuming a few basics:

  • there are differing economic classes
  • each lower one (ideally) graduates to the next higher one
  • we are, rather I am, somewhere at the upper-end of well-off
  • Area: SoCal, near the beach

class graduation

Full disclosure, this question is to satisfy a disagreement; in order not to taint the question, my side of the dispute will not be identified.

The 2 differing assertions are:

  1. my home prices are more affected by a fewer number of wealthy homeowners near my neighborhood.
  2. my home prices are more affected by a vastly greater number of poor/blue collar renters/homeowners nowhere near my home.

The supporting argument for assertion #2 is that those people at the lowest end of the spectrum are renting/buying in such great quantities that the supply is exhausted. Subsequently, all home prices, even those hundreds of miles away in higher-classes, are affected through a "ripple effect".

Extra kudos for those with more understandable answers. The final assumption, I'm not an economist.

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