Here’s something we haven’t looked at for a long time: San Diego
population growth and migration patterns.
This was a favorite topic of mine back in the day when San Diego’s
housing bubble cheerleaders implied some sort of population explosion
via their favorite catch-phrase, “Everyone wants to live here.”
In fact, San Diego’s population was growing quite modestly at the
height of the boom. And San Diego’s supply of housing was growing
faster than its population. And domestic migration was firmly
negative, meaning that more Americans were moving out of San Diego than
moving in. The mild population growth was in fact due to foreign
immigration and, moreso, to new San Diegans being born. (My
little joke at the time was that even Countrywide wasn’t yet making
home loans to fetuses).
But I digress. The point is that this once-popular topic has
lately been neglected here at Nerd’s Eye View. Let’s have a look
at the latest numbers:
This does not bode well for
This does not bode well for San Diego’s long-term future, and is thus a negative for our real estate values. If one believes that the number and income levels of a region’s homebuyers and investors shape demand, then we should worry.
Dissecting the numbers, it appears that the meager population growth we do have is from our above-average fertility plus an influx of foreigners. Those lower-income folks are replacing the outflow of middle-income families and businesses, driven out by CA’s anti-business government, high taxes, and dire fiscal prospects.
Demographics are destiny.
EconProf, how do you draw the
EconProf, how do you draw the conclusion of “Those lower-income folks are replacing the outflow of middle-income families and businesses”? I don’t see any income number in those charts. Seems like the net migration between 2000-2008 is pretty much flat. Increase in 2000-2003 offset the decline in 2004-2007. All the while, birth rate and foreign migration is a net positive over the 8 years of about 500k people (eye balling). How much of that 500k is new birth vs foreign migration, I don’t know. But event if it’s child birth, as long as total population continue to increase, those who are born today will start looking to buy a house in 30 years. So, unless we start seeing a net outward migration both domestically and internationally for a decade or more, I’m not too worried.
EconProf wrote:This does not
[quote=EconProf]This does not bode well for San Diego’s long-term future, and is thus a negative for our real estate values. If one believes that the number and income levels of a region’s homebuyers and investors shape demand, then we should worry.
Dissecting the numbers, it appears that the meager population growth we do have is from our above-average fertility plus an influx of foreigners. Those lower-income folks are replacing the outflow of middle-income families and businesses, driven out by CA’s anti-business government, high taxes, and dire fiscal prospects.
Demographics are destiny.[/quote]
This is Machete, with a special Cinco de Mayo message… to San Diego!!!
http://www.youtube.com/watch?v=k9tIoJBhp18
Scary stuff! If we are going
Scary stuff! If we are going to get shredded by Mexicans wielding machetes, can they at least wait until we are south of the border so we can take advantage of affordable health care, when they stitch us back together.
qwerty007 wrote:Scary stuff!
[quote=qwerty007]Scary stuff! If we are going to get shredded by Mexicans wielding machetes, can they at least wait until we are south of the border so we can take advantage of affordable health care, when they stitch us back together.[/quote]
Bwahahahaha!
Bureau of Labor Statistics
Bureau of Labor Statistics just came out with new unemployment figures which show California’s dire condition. Our unemployment was again 3rd worst in the nation, following Michigan and Nevada.
But a worse figure shows CA and MI tied at 21.7% unemployment for M-6, the broadest definition of unemployment. This includes discouraged workers, involuntarily part-time, and “marginally attached” workers.
Poster AN, if you are comfortable being tied with Michigan, you should buy CA real estate.
So Econprof,if one has the $$
So Econprof,if one has the $$ and a steady job, is it better to buy when unemployment is high or when unemployment is low?
Of course many factors
Of course many factors determine whether it is a good time or not to buy. But considering only unemployment, I’d suggest when it is high–since RE prices have been hammered–and is about to go down. Accordingly, CA is a bad bet given current trends, although regions within CA vary widely.
Here’s an interesting problem
Here’s an interesting problem for you to contemplate.
There is an apartment building somewhere in San Diego, with 100 units in it.
In any given year, one family gives birth to a child (positive natural increase), one family moves out of the complex to Florida (negative net domestic migration), and one family moves into the complex from Shanghai (positive net foreign migration). Assume that families moving in are childless couples and families moving out are empty-nesters. Assume that there are no similar complexes nearby, and net construction (new units constructed less old units condemned) is zero.
1. What happens to the population of the complex over time?
2. What happens to the number of households and the average household size?
3. What can you say about prospects for real estate prices in the complex?