When we discussed location, we talked about how San Francisco's average household income was significantly higher than Los Angeles'. Well much like how household income is much higher, as is cost of housing and as cost of housing rises, we tend to see major changes in demographics. In Redwood City, a suburb of San Francisco, the average price for a house is $1.3 million.

http://www.siliconvalleyrealestate.com/images/redwoodcity_sign.jpg.scaled.1000_1000.jpg
In contrast, Palm Springs, a very lovely and artsy city located in the Southern California desert, has an average home price of about $265,000.

http://www.dhsspa.com/assets/themes/dhsspa/img/Attractions-at-Palm-Springs-Desert-Hot-Springs-Spa-Hotel.jpg
When an area has a higher median home rate, it tends to reflect higher education rates and lower population growth rates compared to a cheaper city. Sure enough, according to the US Census, 84.9% of Redwood City residents are high school graduates and 41.3% have their Bachelor's Degree. Palm Springs boasts a similar high school graduation rate, 87.4%, but has a lower Bachelor's Degree rate, only 34.3%. Redwood City has a predicted 11% growth rate over the next five years whereas Palm Desert county saw their population increase increase by more then 33% in the span of just 5 years*. What this reflects is how a poorer climate will affect an area's population. The hot, dry lifestyle of a Los Angeles suburb is literally quite hellish, meaning houses will be cheaper and people will choose to live there because of pricing convenience. The San Francisco suburb on the other hand has a cooler climate and is very lush, making it heavily sought after. Therefore, housing prices are higher which drives many likely buyers out of the market. Now driving buyers out of the market isn't entirely bad for is has some benefits (i.e. crime rates). Redwood City has a much lower crime rate than Palm Springs, and it's probably got something to do with the accessibility to money by home owners up north.
* all numbers used are taken from the US Census Bureau and data is based off of the 2010 US Census:
https://www.census.gov/quickfacts/table/PST045215/0655254/embed
http://www.census.gov/quickfacts/table/PST045215/0660102
No comments:
Post a Comment