Second Largest in Population

Just a quick note: The West and the South are the two fastest growing areas, and the only region with more people than Los Angeles County is New York, according to the Census Bureau. Supply vs. demand seems to dictate a constant need for housing in these highly populated areas well into the future, especially in California, since Riverside area is the fifth-largest growing area in the U.S. in population.


Long Beach

Housing Demand Keeps Prices Up

California has the second-highest increase in the number of housing units of any state last year, adding over 181,000 new dwellings. Yet house building sources and others say that California should be building 250,000 new units per year, and that we are not keeping up with the demand in this state. This demand will maintain the real estate for many years into this future in the west, due both to immigration from other states and other countries, and natural population growth.

Why the Housing Boom Will Stay

Harvard University's Joint Center for Housing Studies points out the main pillars of the housing market in its 2006 report, where downturns in the market will not outweigh the long term factors:

Several factors are at work.

Booming household growth. The nation will add 1.37 million new households this year. Part of this is natural population increase but this has also been bolstered by foreign migrants.

Graying boomers. As boomers have aged and prospered, they have begun to buy vacation or second homes in increasing numbers. This trend will widen as they near retirement.

Changing household composition. Social and cultural changes add to the number of households. There are more single-person households than in the past. Fewer adult children live with their parents; they establish their own homes. Increases in divorce rates result in the division of multi-person households into smaller ones. Family sizes have shrunk; a community may have about the same population but more households.

Minority gains. Ownership among formerly under-represented minorities has increased. Black and Latin home ownership has always trailed that of whites but the past 10 years has seen minorities making great progress.

Southern California Immigration

Immigration is one of the factors seen by Harvard University's Joint Center for Housing Studies and others as one of the three factors of the rising cost of real estate both nationally and locally, the others being global financing and restricted growth policies. A study released by the Public Policy Institute of California found that 26 percent of California’s population in 2000 is foreign-born, as compared to 22 percent in 1990. According to the U.S. Census, 2.8 million new immigrants arrived in California between 1990 and 2000. 46.2 percent of new immigrants were born in Mexico, compared with 38.2 percent in 1990. A full copy of the report can be obtained here from the Pacific Council's site.