Golden State Resilience: Four Considerations for California’s Housing Market
Despite national headlines suggesting otherwise, California’s housing market is thriving, with several key factors driving its resilience. This article explores:
- The state’s enduring status as an economic leader
- The persistent mismatch between housing supply and demand The key factors that have allowed California to weather the challenges of the market
- The future outlook, where optimism and caution are equally warranted in understanding the state’s housing landscape
According to John Burns, California’s economic strength is a testament to its massive scale potential. As of 2023, California’s annual GDP was approximately $3.9 trillion, making it the most significant state economy in the US and the fifth-largest global economy compared to nations (just ahead of India). In April 2024, the state had a job base of 17.9 million and added 206,000 jobs from a year earlier.
California’s population growth potential is a promising factor for housing demand. As of 2023, it remains the most populous state, with 39.2 million people. While it has experienced slower population growth over the past decade than in previous decades, we see hints of that trend reversing. The state’s population grew by 67,000 in 2023 for the first time since 2020. Decreasing mortality and rebounding legal foreign immigration are the primary factors instilling hope for the Golden State’s future.
As of May 2024, the two California regions were JBREC’s top-ranked US housing regions, and Southern California led in year-over-year home value appreciation.
