Wednesday, February 29, 2012

California to Suffer Housing Shift

UCLA forecasters are predicting a shift in housing as more people are relocating around the coast where they can be closer to their jobs and not have to travel as much. The reason for this shift in demand for housing from more single person houses to multi-family houses on the coast is because of rising gas prices and a bad economy. As the article states the demographic of California is rather young and the younger generations see value in living closer to where they work. The article states that there is already evidence of this shift as a decline for single person housing permits is decreasing as the demand for multifamily housing permits is increasing.
The demand for new houses in general is shifting in as the economy is taking a toll on people and they can't afford to live in a single house by themselves, so they are moving in with family members to save money. This shift in demand is negatively affecting the economy as it requires less labor to build a mulitfamily house than a single person house and the fact that California will have to wait for a construction boom will keep unemployment rates high until 2013 where they will issue more building permits. This will create more jobs and lower unemployment. This article discusses two shifts in demand for housing in California if you focus on single person houses and multifamily houses as the demand curve is shifting out for mulitfamily houses and in for single person houses. The second shift in demand deals with new houses and the demand shifting inward as people who are unemployed can't afford it and need to move in with their family.

http://articles.latimes.com/2011/jun/15/business/la-fi-econ-forecast-20110615

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