Low Household formation puts downward pressure on rents and home prices. This is not surprise since 85% of college graduates are moving back home. In addition, a lot of these recent college graduates also have higher student loan balances, which will put them out of the housing market for several years. Plus you have the high underemployment in this recession.
The 2009 year-round vacancy rate in California metropolitan areas was:
- 12% in Bakersfield, up from 9% in 2008;
- 6% in Los Angeles, up from 5% in 2008;
- 5% in Ventura, with no change from 2008;
- 12% in Riverside, up from 10% in 2008;
- 13% in Sacramento, down from 15% in 2008;
- 10% in San Diego, with no change from 2008;
- 10% in San Francisco, up from 9% in 2008; and
- 6% in San Jose, with no change from 2008.