According to experts with the University of Southern California Lusk Center for Real Estate, population growth and demographic shifts, particularly the ongoing maturation of a diverse, well-educated Gen Y, will drive improvements in the real estate market over the next 10 years.
Additionally, Lusk Center Chairman of the Board Stan Ross points out that immigrants were responsible for 25 percent of America’s high-tech startup companies between 1995 and 2005 and 25 percent of American’s international patents.
Despite a slight dip in immigration during the recession of 2007-09, the 2010 Census showed the U.S. population grew 9.7 percent to 308,745,538 with another 3.4 percent growth predicted for 2011. Ross points out that with its 77.4 million members, Gen Y (current 15-32 year olds) is roughly equal in size to the baby boomers (current 46-64 year olds), but more educated and diverse.
Ross believes that related demographic shifts will support economic growth and market improvements in the region and nationally:
- Together, baby boomers and Gen Y comprise 50 percent of the population and will soon be part of the largest U.S. wealth transfer ever
- 60 percent of Gen Y goes to college
- More than 38 million U.S. residents (12 percent of the population) are foreign born
- 33 percent of all PhDs and 57 percent of all post-doctorates in science and engineering were awarded by U.S. universities to foreign students
- About 4.3 million Gen Y residents reached age 22 in 2010
As more of this group enters the workforce over the next 10 years, they will produce a massive increase in housing demand. However, Ross points out that Gen Y will be relatively prudent when it comes to real estate investment.
Gen Y will produce market potential for every residential product except senior housing, an assertion made by the Summer 2010 ULI/Lachman Associates Survey, which found 37 percent are renters; 35 percent are homeowners; 26 percent live with parents/siblings or student housing; and 2 percent live in mobile homes.