The slow pace of homebuilding will hurt California by driving millennials out of state to buy, according to a gloomy assessment by California Association of Realtors CEO Joel Singer. (Dennis McCoy | Sacramento Business Journal)
Ben van der Meer
Staff Writer-Sacramento Business Journal
Apr 23, 2015 – 2:28pm PDT
The slow pace of homebuilding will hurt California by driving millennials out of state to buy, according to the CEO of the California Association of Realtors.
“They’re not going to be a ‘lost generation’ in terms of housing,” Joel Singer of CAR said after a lunch presentation Thursday. “They’re going to be a lost generation for California.”
Singer’s market outlook at the association’s legislative week in Sacramento provided some evidence. State gaps in affordability, rate of home ownership and housing production could push millennials, once they’re in full homebuying mode, to look outside of California, he said.
Low production of new homes has grown as a problem in recent years. Statewide, far fewer were built than the 175,000 new housing units needed to keep up with need, Singer said.
In a series of charts, Singer showed an increasing gap between rates of home ownership between younger buyers and older ones, and how the minimum income needed to buy a home has soared in the last two years, particularly in large metropolitan areas, by about $35,000. He singled out Sacramento as a fairly affordable market by state standards, but said statewide the situation was not getting better.
“This is something we did to ourselves,” Singer said. Because many existing homeowners favor slow-growth policies, and because of the state’s legal and business environment, homebuilders haven’t had much reason to ramp up production, he said.
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