Welcome to Money for the Rest of Us. This is a personal finance show on money. How it works, how to invest it, and how to live without worrying about it.

I'm your host, David Stein, today is episode 357. It's titled, Is a Housing Crash Coming?

Earlier this year, LaPrile and I drove from Palm Springs back to our home in Tucson.

We took a route that went by the Salton Sea, one of the largest lakes in California.

It's over 300 square miles. The water is tranquil, the lake is surrounded by white beaches.

This lake is sometimes called the accidental lake. It was formed in 1905 when the Colorado River reached a canal

and then for two years water poured into this desert basin. In the 1950s, the lake became a thriving tourist destination.

Frank Sinatra visited. There were marinas, houses were built. But in the 1970s, a series of storms destroyed many of the houses and resorts.

Then the drought hit and the water in the lake began drying up. Migrating birds used to stop.

But as the lake shrunk, the fish population died and the number of bird species has dropped 25% in the last five to ten years.

The town that we stopped in was really, really fascinating, was Bombay Beach.

There's only about 250 residents that call Bombay Beach home. Back in 2015, three artists started an annual art, music and philosophy festival in the town.

One weekend each year and the date is always changing. They don't advertise it. They don't sell tickets, word of mouth.

And it turned this town into sort of a really cool public art exhibit, fascinating combination of art and decay.

Mark Hegdorn said the town was dying. They're bringing in young people, fixing places up.

It's a shot in the arm, said Ernest Hawkins. This place used to rock. Then it went to sleep. Everyone left or got old.

I looked on Zillow to see what one could purchase a property in Bombay Beach. You can buy a lot for about $4,500.

I saw one manufactured house. It sold in 2019 for $32,000. About $25 a square foot.

Now Zillow estimates its worth about $52,000 or $43 a square foot.

Bombay Beach has got to be some of the cheapest real estate in California, which emphasizes the point that real estate is very much local.

Similar to when you look at a stock, there's what's known as systematic risk and non-systematic risk.

Non-systematic risk is very specific to the company or to a neighborhood, whereas systematic risk is inherent to the entire market.

...