”Survey says” looks at various rankings and scorecards judging geographic locations, noting that these grades are best seen as a mix of art and data.
Buzz: For young renters, real estate seems to be “price-price-price,” and not the classic “location-location-location” thinking.
Source: My trusty spreadsheet analyzed a Lending Tree compilation of Census Bureau housing demographics for 50 large metropolitan areas.
Details
One should view youthful renters as a highly desirable demographic because it’s a group with plenty of promise.
Locally, we see the typical Inland Empire’s renter is 30.7 years old — seventh-youngest among the 50 metros — while L.A.-O.C renters are 33.7 years old, 14th oldest.
Nationally, the youngest renters can be found in St. Louis, at 29.6 years, Houston and Salt Lake City, at 30.1 and Memphis at 30.4.
Oldest? Pittsburgh, at 36.5 years, the New York-New Jersey metro, at 35.6, Providence, R.I., at 35.5 and Hartford, Conn., at 35.4 years.
But what does the age of renters tell us about a housing market? My spreadsheet broke the 50 metros into thirds, ranked by renter age — then compared the youngest markets with the oldest ones.
Rent costs? Young adults tend to have limited earning power, so it’s logical that affordable towns are preferable. Monthly rent costs average 8% less in young-renter markets — $1,090 vs. $1,180 in old-renter metros.
Southern California has few cheap places to be a tenant: Inland Empire, 11th highest at $1,326 monthly vs. L.A.-O.C, fifth-highest at $1,545. Still, it’s 14% less expensive inland.
Owner costs? Youthful renters seek homebuying potential. Homes with mortgages cost 17% less a month to own in young renter markets — $1,566 vs. $1,892.
Southern California? Again, no bargain: Inland Empire, 12th highest at $1,917 monthly vs. L.A.-O.C, No. 4 at $2,581 But you save 26% buying away from the coast.
Caveat
The transition from renter to owner is by no means quick. The stats show across the 50 metros, folks in homes they own are 19 years older than renters, on average. The Inland Empire had the nation’s biggest gap — 21 years — while L.A.-O.C.’s 18-year difference was the 13th smallest.
Bottom line
Money’s a huge factor in a young adult’s life. So, it’s logical this price-conscious demographic is more likely to congregate in towns where buying a home seems attainable.
When I looked up homeownership rates for these 50 population hubs, my spreadsheet found young-renter markets with 66% of households living in a home they own compared with 63% in metros with the oldest renters.
Southern California is a perfect example. The kids move east because the lower-priced Inland Empire’s ownership is 65% — a mid-range No. 25 ranking on the national scale — vs. L.A.-O.C’s last-place finish at 48%.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
Source: Orange County Register
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