California Rental Armageddon: Nearly half of Los Angeles adults doubling up, working class moving out, or you have the option of simply living in poverty.
California like the rest of the nation has gained a large number of rental households. Many of these households were formed from the ashes of the 1 million completed foreclosures. Over the last ten years the nation has lost 1 million net homeowner households and has gained a whopping 10 million rental households. L.A. County with roughly 10 million residents is predominately a renter county. Over the last ten years the large gain in California households has come in the form of rentals. Maybe you find living with roommates deep into your 30s and 40s as awesome or maybe you enjoy living a Spartan lifestyle just so you can pay your monthly rent while hearing helicopters overhead in your hipster neighborhood. Every piece of research simply shows that people are being pushed into spending more money on housing. Some say move out. Well guess what? Many middle class Californians are doing just that. The rental and housing market has gone into full on financial Armageddon mode yet in typical California fashion, the sun keeps glowing brightly. Ironically over time people think it is normal to dump every nickel you have into housing. Let us look at three trends impacting the rental market in California.
Moving out
The urge to buy real estate is a deeply rooted American concept, although Millennials might be changing their tune. For the majority of the country, buying a home is a simple endeavor. With your typical house costing $200,000 and with low interest rates, simply having the median household income is good enough to not have your home consume every penny of your income. But in California, we have $700,000 crap shacks that look as if a two-year old developed it in their first art experiments. In the last couple of years, there is a vocal group saying “hey, if you can’t make it in California get out!” Apparently some people are listening to this:
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