Dr. Housing Bubble 3/8/15

[Crewleader]

The California renting tsunami: In the last ten years California has gained nearly 1 million renter households while seeing a decline in the homeownership rate.

Does it feel like more renters exist in California? It should feel that way because over the last ten years we have gained a net of 1,000,000 households that rent while seeing homeowners decline by over 200,000. California has always been one of the states with a large renting population. In fact, in places like San Francisco the ownership rate is in the 30 percent range. In the last 10 years there has been a dramatic shift in the number of households that rent in California. In the last 10 years we have gained 500,000 households in California. However, most of this growth has come in the form of renter households. What are the implications of this change when it comes to voting or even how residents view their neighborhoods? We have 2.3 million adults living at home with parents because they can’t afford rents let alone venture out and purchase a home on their own. If we look at the raw figures, what we find is that renting has been trouncing home buying for the last 10 years in California.

The renting tsunami

In total, we have 12.6 million occupied housing units in California. So when you see a swing of 1 million, that is a big change. In 2005, 41 percent of California households rented. In 2013 it was 46 percent and the trend has continued well into 2015. In fact, with the run-up in 2013 driven by investors we’ve seen more people having to get creative when it comes to renting. Roommates are a very common living arrangement for those in Los Angeles.

I went ahead and dug up Census data for California regarding homeownership status:



Source: Census, California household data

http://www.doctorhousingbubble.com/california-renting-tsunami-california-renter-households/