A report in the L.A. times confirms what we keep saying here: A housing shift is underway that means fewer homeowners and more renters across California.
As a result, the areas that were hit hardest by the housing bust — including the Central Valley — won’t get a construction boom to pull them out of the economic doldrums.
In our area, who’s going to buy all the new homes out at Loma Rica Ranch if the project goes forward — not to mention the ones that are vacant or in foreclosure. It’s going to take years to sell off that inventory.
We’ve been having an economic development discussion on Sierra Foothills Report about the need to diversify our local economy beyond construction and real estate. I’m not sure it’s sinking in yet, however.
Isn’t it time we “git-r-done”?
The L.A. Times housing report — front page news — is here:
“UCLA forecasters have seen the future of California’s housing market, and it looks like this: more apartments near the coast, fewer McMansions in the desert.
“That prediction is based on several factors, including expectations that rising fuel prices will encourage people to live closer to jobs along the Southland coast and in the San Francisco Bay Area.
“The state’s population is also skewing younger, meaning there will be more demand for urban rental units and less demand for suburban cul-de-sacs, according to the quarterly economic forecast released Wednesday by UCLA’s Anderson School of Business.
“‘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.
“That’s bad news for the state economy, however, for two reasons. One is that construction of multifamily homes requires less labor than construction of single-family homes. Second, areas such as the Inland Empire and Central Valley that were hit hardest by the housing bust won’t get a construction boom to help pull them out of the economic doldrums.”
The rest of the article is here.
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Since the end of WW II, the growth in California has seemed to have been one of automobile dependent urban spawl and mega commutes to work, and urban developement with hardly any mass transportation alternatives. After 65 years of that mindset, California is going to have a lot of areas with empty houses.
Well said, Steve. And it’s going to impact our community too. Our “thought leaders” need to put on their thinking caps.
The Housing Inventory is going to get much bigger and prices will continue to fall, not only for the foreseeable future….but for your youngest child’s lifetime. Folk don’t get, if the USA is able to bring back a fraction of our population base, the pay is gonna be like a quarter more per hour than the folks with the MBA’s flipping burgers. There is now a legitimate company called JustWalkAway, started in CA, that helps folks walk away from their home with the best possible way when all of the repercussions are not good. Hear they charge about a thousand bucks a pop.
The DEBT BS going on in Washington is purely theatre for those planning on crashing the economy anyway. Thanks Tea Baggers and Republicans. You Mom would be so damn proud of you. But in the scheme of things, even that is not going to cause it to get as bad as it will get. How about basically NO HOUSING SALES (unless you are a bizzillionaire). Here is why. Every year we as a country, based on debt already owed will double, due to plain old interest and the US printing money to pay for the interest due, whatever it is). Once the printing of the money stops and the crash happens, we get start over as a country. In other words, better hope they keep printing until you die as you are not gonna wanna live anywhere in the US (or world really) when the printing presses stop. We are TOOO far gone; stopping now just causes the total crash now. That does not mean there are not things you can do. I have a post that you will find insightful but ARE NOT hearing about on the main stream media.
Link: http://curtiswalker.posterous.com/57281248
You may need to copy and paste. Let me know your thoughts.
My observation is that the people who continue to wait for the housing market to “turn around” are for the most part the same people who continue to deny that climate change is upon us. I wonder what it will take for this demographic to finally acknowledge that it is no longer business as usual, and that tectonic shifts in both the economy and the world environmental system have taken place?
John: I agree with your comment that: “tectonic shifts in both the economy and the world environmental system have taken place” with the addition of a third factor, ENERGY, and we know energy is doing the same “tectonic” shift. This Trifecta – and how to go through the shift by making adjustments to your lifestyle now – is the way to go. The term “Too Big To Fail” certainly applies, but fail it will and everything is reset, if you will. This week, GREECE may finally default on it’s debts. How that impacts us, is part of a chain reaction. There are several EU countries whose BONDS will be crap because they are tied to GREECE. Domino impact, and that impact will go throughout the EU and anyone tied or dependent on them for anything will be impacted. Fear will set in and the Dumping Of Bonds will be like a run on the banks. Not pretty, and faster than standing in line to get your money before the banks ran out. That gave me a headache and I think it is nap time.
Not just GREECE–check out what they did in Ireland. They expressed profound displeasure at the bank “privitization” see: theft, heist, steal, and loot banksters of Ireland …this included the “shareholders” that were thrown under the bus and citizens that were fed to the lions…I do believe there’s a European network moment happening there…I wonder who’s playing Albert Finney?
Kate
That’s a pipe dream at this point–and those depending on the crack cocaine of “redevelopment” (in its current incarnation) are going jonesing and wanting as well. The good news about skewing younger is in consumption and sales. Gov. Brown sees down the road well on that score. I think there should be some kind of penalty (pensions)?, I dunno, that addresses homeowners and state employees who take all their retirement marbles out of state, to enrich, say Texass or Arizona. Who are waaay bigger users of fed tax and welfare dollars than the golden state. We are an awesome state (and smarter too), even if the rw are fearmongering with images of scary gangs and stripper money in a mean Janice Hahn ad…(by the way smart people, RUN, do not walk to the polls in Hahns district) unless you want “zippy the rw nut up” to take care of your business down there. Anyway, we have to rethink what California needs, like ed and safety, vs. Redeveloping more empty single homes some more…Kate
Of course the current unspoken insistence enforced by the government that everyone live in 2×4 stick homes with sewer connections all built to code does increase the cost of housing substantially.
I suspect that many,many people will be making alternative arrangements,simply because there is no work.
California was settled by folks who lived in hovels and tents by todays living standards, but those folks grew the state quite nicely, thank-you. They also enjoyed the process of living in and out of doors simultaneously. The Varian brothers discussed growing up this way in glowing terms in their autobiography.