Our Gilded Age

As I stood in the police and Guard-protected rubble of Pacific Palisades after having toured the 50 square blocks which is Skid Row the day prior, I could not get the above quote out of my head. Twenty-three miles could have been an ocean as to the difference in the societal systems. In fact, that stark difference and dystopian transition happens in a much shorter distance if you drive from Skid Row to Beverly Hills where scenes of open fires, drug deals and garbage piles shift to luscious vegetation and tree-lined streets filled with multimillion dollar mansions.

This post is hard to write as the images are still processing in my psyche. It’s been a difficult re-entry to life after what I saw there. Fresh off the wound that is Helene, seeing the destruction in LA and the depths to which our most disadvantaged Americans have plunged was a punch in the mouth. If my language offends today or is too sharp, I apologize in advance. No longer though can we afford to ignore what is right in front of us.

As you can see from the chart above, population in Los Angeles peaked in 2017 at 13,266,524 people. Since 2020, the Los Angeles MSA has lost 338,910 people and it shows. The above chart includes the recently released v2024 population estimates. Before you get too excited about that recent bump in Los Angeles (up .16% or 21K since 2022), we can see exactly what we saw in national estimates - the majority of our population growth was not a result of “natural change” with net births but due to immigration (detailed graph below).

Hollywood is dead, we’ve been told. In fact, when speaking to residents in LA most of the below-the-line talent has already moved away. If they owned or had a good lease, they are renting out their space as they work in places like Toronto, Georgia or Australia.

According to the Hollywood Reporter, when senior executives in production and postproduction were

Asked about their preferred filming locations for 2025-2026, no location in the U.S. made the top five slots. Instead, Toronto, the United Kingdom, Vancouver, Central Europe and Australia led the pack, while California came in sixth, Georgia seventh, New Jersey eighth and New York ninth.

Las Vegas is also vying to attract studios and capture some of that production-flight. The Nevada legislature is reviewing a bill that would provide $1.8 billion in tax breaks for qualifying productions made in Nevada, beginning in mid-2028 and continuing through 2043:

A renewed push to lure major Hollywood studios to Nevada with favorable tax incentives hit a major plot twist last week when Warner Bros. Discovery announced it was partnering with Sony Pictures Entertainment and Howard Hughes Holdings on tentative plans to construct “a 31-acre world-class production facility anchoring a planned 100-acre mixed-use development” in Summerlin.

Of course Nevada is pushing for this project….I remember my visit to Summerlin in March 2023 where they were furiously building new construction into the clouds.

They need someone to live in those ridiculous, multimillion dollar architectural oddities they built there.

Los Angeles has the highest concentration of entertainment workers in the country according to the BLS. If Hollywood has exited stage left, what industry will breathe new life there? Unemployment in LA was 5.7% in December, much higher than the national average of 4.1%. Labor there looks about what it looks like in the rest of the country with the only category showing sizable gains being the one we discussed last week: Private Education and Health Services.

Courtesy of

K. Pow

Touring around Los Angeles, one can certainly understand why all those support services would be needed to address the addiction and homeless problems, but even those jobs are starting to disappear. Future jobs reports will be important to review for net additions we might see for local disaster response. However, based on what I saw there I do not think we will see material relief in the near-term for the labor market.

What was the difference between what I saw in the Palisades versus Skid Row and even versus what I saw in the aftermath of Helene? Easy comparisons these are not, but important to understand. In diving into the Private Education and Health Services labor category, I also had another epiphany about where some of our housing stock is going that I’m looking forward to share. Additionally, initial February Redfin results are out with some surprising news out of California. Were the rumors true? While in LA, did we witness bidding wars and a mad dash for housing, or did it present itself the data? And, speaking of Beverly Hills, Trepp highlighted some issues there we will discuss. Finally, I will conclude with existing home sales which will be released tomorrow and who’s hot and who’s not in February.

Without further ado…