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Californians Leaving State Due To High Costs
California’s warm weather, sunny beaches and world-class schools have lured people to the Golden State for decades, but rising home prices are turning that equation around.
Data analysis firm CoreLogic says that for every home buyer coming into California, another three are selling their homes, packing up and moving out, CNN Money reported recently.
The trend of out-migration was also noted in a separate trio of reports released earlier this year by Beacon Economics. Beacon noted that 625,000 more U.S. residents left California between 2007 and 2014 than moved into the state. The vast majority ended up in Texas, Oregon, Nevada, Arizona and Washington.
The search for more affordable housing is sending low and middle-income workers out of the state, while higher-wage workers continue to move in, which argues against the theory that high taxes are driving people away.
“California has an employment boom with a housing problem,” said Beacon founding partner Christopher Thornberg. “The state continues to offer great employment opportunities for all kinds of workers, but housing affordability and supply represent a significant problem.”
Home prices and rents have been rising steadily for more than four years.
CoreLogic figures for September show home prices were up 5 percent year over year in Orange County, nearly 7 percent in Los Angeles County and almost 6 percent in the Inland Empire.
Mel Wilson, broker and owner of Mel Wilson & Associates Realtors in Northridge, said many people who are near retirement or living on a fixed income are looking for a less costly lifestyle.
“As they retire they are trying to figure out how they can live but not outlive their money,” he said.
Many baby boomers are moving to Nevada, Arizona, Idaho, Georgia or North Carolina where home prices are considerably lower. Still others are relocating to Texas. Home prices are cheaper there, he said, although property taxes are higher.
Wilson said high housing prices are also impacting younger Californians.
California home prices have risen in part because of a lack of inventory.
From 2005 to 2015, permits were filed for only 21.5 housing units per every 100 new residents in the state. That put the Golden State second to last behind Alaska, where only 16.2 housing permits were filed for every 100 new residents.
On the flip side, Michigan saw 166 permits filed for every 100 new residents.