There is a mini-boom in office rentals in Los Angeles, but those tracking real estate and the rental market in LA should also keep an eye out for a corresponding boom in the residential rental market, powered by (get ready for it) Millenials. Recent research suggests young adults are moving to LA to stay, and they’re bringing a few interesting real estate trends with them.
A whopping 68 percent of people under 30 who were born in California, want to stay in California, according to the nonprofit California Forward, the think tank behind the recent research. Although the study was aimed primarily at voting patterns and political participation, this news also has implications for the local economy— particularly real estate.
Why are young people so eager to stick around? Not to knock Hollywood, the city of Angels, etc., but the argument could be made that there are plenty of other cities around the country, also known for year-round sunshine and which, on the surface, appear to enjoy better economic prospects.
However, here’s why Los Angeles can still pull more than its fair share of the millennial demography:
Number one, LA is still cool. Young adults today move here to “make it” in the same way they always have. There is also the lifestyle factor: LA, with more than 8,000 restaurants and 400 bars and a thriving nightlife scene, seems designed to cater to the needs of a group of people without families at home (even if they do have work in the morning.)
The millenial generation is also highly mobile and dislikes being tied down to a piece of property. The structure of the real estate market here facilitates just that. This is a generation that loves LA for one of its less-appealing attributes: the ever-changing uncertainty of its markets. The market mirrors similar turmoil in the lives of many young adults, as they find employment, lose it, and find it again. Even if detached, single-family homes around SoCal continue to take a hit, that doesn’t matter to young adults. For them, home ownership has never been less appealing.
As Businessweek explains it, “According to the Consumer Financial Protection Bureau, 20- to 34-year-olds are renting apartments, cars, and even clothing to save money and stay flexible.” It’s only practical: a generation scarred by the Recession and the housing crash remains, for the time being, deeply suspicious of the supposed “permanence” of real estate capital.
All in all, not bad news for Los Angeles.
One compromise between the total commitment required by detached single-family homes, and the rootless freedom of an apartment, might be Los Angeles’ townhomes and condominiums. If that describes what you’re looking for, browse a number of flexible housing options at New Home Source
