Orange County, by most standards, is a great place to live and raise a family. We have beautiful neighborhoods, great public spaces, award-winning schools and the weather is consistently the envy of the country. But as we learned last week, household formation is unfortunately on the decline in the United States. And here in Orange County, we have another problem that isn’t helping the overall economic landscape: young professionals aren’t choosing to settle in Orange County.
Orange County has been gradually losing the number of its young professional workforce for several decades now. The number of 18-44 year olds residing in Orange County has been dipping steadily which presents a problem for housing growth. Typically, young professionals are the ones that purchase larger homes while the Baby Boomers are looking to downsize. With less young professionals in the housing market, Baby Boomers are staying put in their homes, and the market experiences a less productive exchange of homes. The overall problem is that Orange County isn’t widely perceived to have a bustling job market or an affordable housing market for the younger professional demographic.
In 2007, California state demographers estimated that California would hit 50 million residents by 2032. Factoring in recent data and trends, it’s unlikely the state will hit that landmark until 2049. With the state experiencing a slowed influx of new residents, Orange County is further impacted by our aging population. In fact, Orange County is aging faster than California and the US.
Two additional factors having significant influence on our region: 1) Californians are having fewer children per household and 2) Immigrants are also on the decline in search of higher-paying jobs and more affordable housing.
This isn’t bad news. It just means that Orange County’s demographic challenges will produce a much slower growth year over year than what we experienced in the past. So the next time you see a sweeping headline declaring an upturn for the economy and housing, just be mindful that these statements are generally created from aggregated data that doesn’t necessarily represent regional specificity. On the whole, rapid rate of growth and recovery is unrealistic, and here in our beloved Orange County, one can only expect modest growth on the foreseeable horizon. But at least, our foreseeable horizon of endless sand and ocean is breathtakingly beautiful and unique to our residents!