Population Growth

Last week we looked at the high cost to rent as a factor in causing the growth of prices in this market and why, in my opinion, it’s not just a temporary bubble….it’s a reestablishment in values. Today I thought we’d look at how population growth around here also impacts prices and will for some time to come. This chart above tells a bunch of the story all by itself. What it says is that between now and 2040 this area is going to boom. Frighteningly enough it says that as homes become less affordable more and more people are going to be forced to move out of the close in areas. It predicts San Francisco as actually losing population. Never the less…it shows San Mateo County as still increasing by 28% during this period.

According to the US Census the overall Bay Area is predicted to grow 30% by 2040…but housing units are only predicted to grow by 24%. Right now 87% of new housing around here is multi family dwellings. Apartments, condos, townhouses. In San Mateo County there really are VERY few new single family houses being built and, of course, that puts enormous pressure on prices of existing single family houses since SO MANY people want to live in a house.

Interestingly, the Bay Area leads the overall population growth of California by a bunch too. Of course, who wouldn’t want to live here given this area’s ability to support job growth. It’s the place you want to be if you’re in the information economy. None of this is radical news for any of you…I know.  I had a client tell me last week that they thought they could wait 3 or 4 years to buy a house. Of course they can…but are rents coming down? Is the population of this area declining? For those two reasons alone prices will increase just to keep pace with these trends. How could they not.

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