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Drought Complicates California’s Tight Housing Market

Sept. 10, 2015, 11:35 PM

California’s already tight housing market is facing another long-term complication: drought.

The state’s dry spell is creating challenges for developers at a time when home prices are soaring because of limited inventory. The metropolitan areas of San Jose, San Francisco and San Diego had the nation’s biggest gap between the number of new jobs and residential building permits from 2012 to 2014, according to a report Wednesday by the National Association of Realtors. Now the drought, into its fourth year, stands to curb affordability further.

“It’s contributing to price appreciation by restricting supply,” said Mark Boud, founder of Real Estate ...