This is interesting but not surprising. For at least the past two decades, the fastest growth in CA has been in the Inland Empire and the Central Valley, where there is an abundance of land and housing prices were cheaper (not surprisingly, this is the area gaining legislative seats in the current redistricting process). As Chris Lienberger from Brookings has pointed out, however, demographics and consumer preferences are changing. I don't know the exact percentage off hand but something like 50% or more of households do not have children living at home. These people do not want to live in a gated community nor do they want to drive an hour each way to work (or get a gallon of milk). They want to be able to walk to nightlife, a coffee-shop, etc. At the discussion by Mr. Liengerger that I attended, he noted that for most of the post-WWII period, developers got realy good at building single-family homes and for most of the period from 1945-2000, provided these almost exclusively. Thus, therre is a tremendous pent-up demand for urban housing and, in fact, it is this housing that has maintained its value far better during the recent downturn in housing prices.
California to suffer housing shift, UCLA forecasters say
Demand will grow for urban rental units by the coast and shrink for single-family homes inland, resulting in fewer construction jobs and no boom for some areas hit hard by the housing bust.
Chain-link fences surround homes left unfinished in Hesperia. Demand for inland single-family homes is expected to decline. (Katie Falkenberg, For The Times / June 15, 2011)
By Alana Semuels
Los Angeles Times
June 15, 2011
"UCLA forecasters have seen the future of California's housing market, and it looks like this: more apartments near the coast, fewer McMansions in the desert.
That prediction is based on several factors, including expectations that rising fuel prices will encourage people to live closer to jobs along the Southland coast and in the San Francisco Bay Area.
The state's population is also skewing younger, meaning there will be more demand for urban rental units and less demand for suburban cul-de-sacs, according to the quarterly economic forecast released Wednesday by UCLA's Anderson School of Business..."