September 2016 – Napa’s Population & Housing Growth
If you’re wondering what’s driving the housing prices up so high in Napa, look at two telling statistics:
- Population growth
- Housing units growth
From April, 2010, to July, 2015, the population of Napa County grew by 5,926 residents, while the number of housing units grew by just 713.
Since the household size in Napa is 2.71 people, that means 2,186 new units were required to keep up with population growth. Hence, there was a shortage of 1,473 housing units. In other words, less than a third of the number of new units required to meet population growth was actually built. This applies to both owner-occupied and rental housing.
Napa County’s Housing Element Update report shows a projection through 2040 of population growth continuing to outstrip housing growth. The result will be housing units continuing to become more and more valuable as demand continues to outpace supply.
For both home owners and investors, this news is good. It means that Napa property values and rents will continue to increase long term and make investing in the county a very solid long-term return.
Investors should do well in all property types, from single family, to condos to multi-family. And while there will always be the cyclicality of the housing market that makes predictions for short term appreciation difficult, long-term appreciation is guaranteed barring a major unforeseen change in population growth or a complete change in the county’s land-use and/or housing development approvals policy.