Demographics changes point to a future where more Californians rent in the city, and fewer buy suburban McMansion, according to UCLA's quarterly economic forecast.
That means fewer construction jobs, thus little jobs recovery at all in California. After all, the state's 13% unemployment rate relates closely to its 75% decline in construction spending since 2005.
Study author Jerry Nickelsburg tells the LA Times:
"The incremental demand for housing is moving more into multifamily housing," said Jerry Nickelsburg, senior economist with the forecast. "Many of the younger generation have been buffeted by the boom and bust in the housing market, and see value in living closer to work."
This means "there is an even larger structural unemployment problem in California than we originally thought," Nickelsburg wrote in the forecast. "Not only do we have excess construction, real estate and support skills, but some of those that will be demanded will be in the wrong geography."
"In a typical recovery, you get a bounce-back in housing and hiring of a lot of construction workers," Nickelsburg said in an interview. "We're not seeing that this time, which definitely slows the recovery, and slows economic growth."
In addition, California is one of the youngest states in the nation, according to census data, with a median age of 35.2, compared with 38.0 in New York. Although there are many Gen Xers of home-buying age in the state, many "bore the brunt of sub-prime mortgage and housing bubble crash," Nickelsburg said, and now do not think a home is a safe investment.
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Full story at http://feedproxy.google.com/~r/businessinsider/~3/MVztB_U13S4/future-california-housing-urban-rentals-2011-6
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