Are People Leaving California in Droves?
I’m sure people have seen headlines and videos of “people are fleeing California!” and “Mass Exodus!” and “Texes/Idaho/Nevada/Florida, etc are being overrun with Californians!”
And obviously there are a lot more people moving to those locations than in past years. The ability to work remotely, retired people cashing out, cost of living; these all play a factor.
Researchers analyzed credit bureau information to determine where people moved during 2020. They found that most people were moving within California. People leaving San Francisco has certainly been the case. Rents have dropped and I looked at the MLS data of available properties in 2020; it was the highest number of properties for sale in San Francisco since the peak of the housing crash in 2010. (Surprisingly, this had little impact on prices; the median sales price actually increased 1.8% from 2019 to 2020. It rose for single family homes, dropped for condos/townhouses).
But where are they going? According to the San Francisco Chronicle, the top 5 destinations of those leaving SF were 1. Alameda County 2. San Mateo County 3. Marin County 4. Santa Clara County 5. Sonoma County. In fact, the top 15 destinations are all in California. With those top 5 destinations being other SF Bay area counties, it has had an interesting affect on the housing market. I spoke with a client who owns in Sunnyvale but lives in LA, and her perception because of many of these articles was that our housing prices must be getting hammered. It's almost $300k in the opposite direction...
The median sales price in Santa Clara County for a single family home in December was $1,355,000. For the first 10 days of March, it is $1,650,000. That is a 22% increase. The townhouse and condo market has been slower, which was typical of all of last year, but still appreciated 7% in that same timeframe. I think the biggest contributing factors to that is that for people having to deal with Shelter In Place, they wanted space. They wanted yards. They wanted more privacy when working from home. People disproportionately pursued single family homes instead of condos and townhomes for much of last year. That will likely change moving forward when things normalize again.
I wanted to address this because it is confusing for people to see the perception in the media that everyone is leaving, and then be trying to buy a home and think, “Then why are there multiple offers on every single property I’m interested in, and why did I just get outbid by $500k?!”
The answer is, already low inventory, low interest rates, money from stocks and people moving from the city to the suburbs, but still remaining fairly local. It has created the perfect storm for a market that I think is more competitive than in 2006 or 2018.