Geographically, the disastrous housing bubble of the 2000s was heavily driven by the centrifugal force of rising home prices in California's coastal cities flinging people out into inland California, Nevada, and Arizona, where (along with Florida) the vast majority of defaulted dollars were lost before the onset of the recession, in which mortgage defaults were the first domino to topple.

From the L.A. Times today:

Southern California’s housing recovery barreled forward last month, pushing prices and sales to levels not seen in years as buyers faced stiff competition during the spring home buying season.

The median price reached $368,000 for all homes in the six-county Southland, which marked a 24.7% increase from the same month a year earlier and the highest price in five years. The number of sales, 23,034, hit the highest level for a May in seven years, real estate information provider DataQuick said Tuesday.

Historically low inventory and mortgage rates have ignited bidding wars and helped turn the housing market into an economic bright spot — in the Southland and nationwide. Investors have also played a major role in the recovery that began last year, purchasing run-down, lower-cost properties to fix up and then rent out.

Home prices in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties all posted double-digit increases last month compared with May 2012. In Los Angeles, the median skyrocketed 30.2% to $410,000.

The swift price increases have raised bubble concerns among some, but many experts note prices remain far from the peak and say the spikes will likely ease as inventory increases from new home construction and as more owners — lured by higher prices — place their homes on the market.

Still, May’s median price was 27.1% below a peak of $505,000 in 2007.

A major premise of current conventional wisdom about why we shouldn't worry about the Gang of Eight's amnesty bill is that because low skill immigration from south of the border had been relatively low from the economy's collapse in 2008 through about 20011, it will never, ever pick up again.

Perhaps, though, it would be prudent to wait awhile to see if that turns out to be true?

Okay, I'm sorry, forget I ever said anything so wacko extremist. Prudence is evil; all that matters in setting public policy is the Dream.