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Real Estate Implications of Population Shifts in California Through 2050

Urban Areas in California Are Evolving In real estate, first movers define the market. By the time you read reports on what’s trending, it is often already too late. Reports involving US census data along with demographic projections issued by the state of California provide a a data-driven picture of how urban areas in California are evolving, particularly in the greater Los Angeles metro area. Understanding the real estate implications of those changes can provide significant value in terms of determining which income generating properties are best positioned to perform in the new environment. Taking a proactive approach to real estate investing offers many benefits beyond the financial, such as having better leverage in future deals and earning a reputation for being right. No one can see the future, but investors who have the better models of how the market is changing will have a distinct advantage. Trend 1: The End of Booms Right now, 15 percent of the population is 65 or older. By 2030, it will be more than 20 percent. Investors have already cornered a majority of the best deals for real estate syndication and investment around properties concerned with healthcare and services for the aging. What people may not realize is that the replacement birth rate in the US is low but remains steady. There has even been an increase in birth rates in recent years. This will put an end to generational bubbles like the Baby Boomers for the foreseeable future. The coming trend in real estate investment through 2050 will be greater marketing to the swelling buying power of younger professionals who are flocking to inner cities. Trend 2: The New Work Force Hispanics became the majority in California in 2014, but what matters most is their ages. The California Department of Finance projects that by 2030, whites in California who are aged 65 or older will number 4.1 million, while only 3.8 million will be under 25. In comparison, Hispanics aged 65 or over will number 2.2 million and those aged 25 or under will equal 7.2 million. By 2050, adults of working age in California will be predominately Hispanic. To be successful in reaching these working...