Real estate is more of a people business than a property sale business. Without enough people in a specific region in need of homes to purchase or lease, there wouldn’t be a need for real estate agents and brokers. Additionally, licensed agents need to first build a solid and positive rapport with their new prospects or existing clients before showing them properties. California leads the nation in terms of population numbers and several other major demographic trends related to jobs, revenue streams, and overall economy size as will be covered below in this blog.
California – The 5th Largest Economy in the World
As of 2018, California is currently ranked as having the world’s fifth-largest economy, according to data released by the U.S. Department of Commerce. The 2017 Gross State Product (GSP) for California was listed as an incredible and staggeringly high $2.747 trillion dollars. The 2017 numbers moved California up from sixth on the global list to fifth after surpassing the United Kingdom’s $2.625 trillion dollar amounts.
The 2017 and 2018 ranking of California as the fifth-largest economy in the world was the highest annual ranking since 2002. Back in 2012 during the depths of the recession and near the all-time record foreclosure filings for the state, the California Gross State Product numbers of $2.003 trillion made the state the 10th-largest economy in the world. As such, it was quite an accomplishment to move up from 10th in size to 5th in just five years between 2012 and 2017.
The Top 5 largest economies in the world as of the end of the 2017 year were as follows:
Nation or State Gross Domestic or State Product (2017)
- United States $16.644 trillion
- China $12.015 trillion
- Japan $ 4.872 trillion
- Germany $ 3.685 trillion
- California $ 2.747 trillion
Rounding out the Top 5 for largest state economies were as follows:
1. California
2. Texas
3. New York
4. Florida
5. Illinois
Conversely, the three U.S. states with the lowest Gross State Product (GSP) revenues or the smallest economies were Vermont, Wyoming, and Montana.
California’s Demographic Trends
Let’s review below the latest reported U.S. Census Bureau data trends for California to get a better snapshot of population and other demographic numbers that directly impact the real estate profession. Some of these details include the population numbers; age, gender, and race percentages; housing units and household formation swings; and the latest income and poverty data.
U.S. Census Bureau Data – California (2017)
Population
Population (July 1, 2017): 39,536,653
Population Base (April 1, 2010): 37,254,518
Population percentage change (April 2010 – July 2017): + 6.1%
Age and Gender
Persons under 5 years: 6.3%
Persons under 18 years: 22.9%
Persons 65 years and over: 13.9%
Female persons: 50.3%
Race and Hispanic Origin
Hispanic or Latino: 39.1%
White alone, not Hispanic or Latino: 37.2%
Asian alone: 15.2%
Black or African American alone: 6.5%
American Indian and Alaska Native alone: 1.6%
Housing
Housing units (July 1, 2017): 14,176,670
Owner-occupied housing unit rate (2012 – 2016): 54.1%
Median value of owner-occupied housing units (2012 – 2016): $409,300
Median monthly expenses for homes with a mortgage (2012 – 2016): $2,157
Median monthly expenses for homes without a mortgage (2012 – 2016): $517
Families & Living Arrangements
Households (2012 – 2016): 12,807,387
Persons per household (2012 – 2016): 2.95
Living in same house 1 year ago (2012 – 2016): 85.7%
Language other than English spoken at home (2012 – 2016): 44.0%
Income & Poverty
Median household income (2012 – 2016): $63,783
Per capita or individual income in past 12 months (2016 dollars): $31,458
Persons in poverty: 13.3%
Source: https://www.census.gov/quickfacts/ca
California’s Bright Future
California is on pace to exceed 40 million residents in 2019. One in every eight Americans today live in the golden California state. California’s population base is almost one and a half times that of the second-place state named Texas (28 million residents).
In 1900, there were less than 2 million people in the state. By 1950, the population reached 10 million residents. Between 1950 and the year 2000, the state’s population had tripled (from 10 to 30+ million) in the second half of the 20th century. By 2050, the projected future population numbers are estimated to be well over 50 million residents for California if the same annual growth rates continue.
The continued growth of the population base and the state’s economy offers California real estate professionals more income potential than perhaps any other place in the nation, if not the world. The combination of the solid economic and demographic trends along with the near record high home prices in most regions of the state may provide agents and brokers incredible business and commission opportunities for many years or decades to come.
