California’s housing affordability crisis is prompting some residents to look for homes in less expensive areas or outside of the state.
New research from Realtor.com, “The Home of Home Search,” reveals affordability issues are driving California residents to search for homes in Phoenix, Las Vegas and Prescott, Arizona, as well as in more affordable California counties.
In 16 of California’s hottest markets — including Santa Clara, San Mateo and Los Angeles — outbound home searches are two times greater than the U.S. average.
The analysis examines realtor.com home searches in 16 California counties and American Community Survey migration estimates.
“Many California residents may have reached their breaking point,” said Danielle Hale, chief economist for Realtor.com. “Affordability is pricing them out of the California home market and many are searching for more affordable options in other areas. This exodus could help slow price appreciation in California, but potentially heat up prices and reduce inventory in surrounding markets.”
In addition to Santa Clara, San Mateo and Los Angeles, the top California counties that residents are leaving, according to ACS migration patterns, are split between the northern and southern areas of the state.
In rank order, they include: Napa, Monterey, Alameda, Marin, Orange, Santa Barbara, San Diego, Imperial, Ventura, San Francisco, Santa Cruz, Tulare, and Sonoma.
California median list prices have increased 83 percent over the last six years, to $549,000 from $300,000, outpacing local income growth by three times.
According to Realtor.com’s analysis, 52 percent of residents looking outside their county are looking to move outside California to nearby states.
The top 10 out-of-state destinations include, in rank order, are Phoenix (Maricopa County); Las Vegas (Clark County); Prescott (Yavapai County); Boise (Ada County, Idaho); Reno (Washoe County); Lake Havasu City (Mohave County, Arizona); Pima County, Arizona; Coeur d’Alene (Kootenai County, Idaho); Austin (Travis County, Texas); and the Big Island (Hawaii County, Hawaii).
On average, those searching out-of-state are looking at properties that are 43 percent more affordable than their current county.
Additionally, nearly half — 48 percent — searching outside their county are looking within California.
The top 10 in-state counties most searched by those looking to leave their county are Riverside, San Bernardino, Los Angeles, Orange, Sacramento, San Diego, Placer, Contra Costa, El Dorado, and Ventura counties. Those searching in other California counties are looking at properties that are on average 17 percent more affordable.
M. Dean Vincent is the 2018 Chairman of the Santa Clarita Valley Division of the 10,300-member Southland Regional Association of Realtors. David Walker, of Walker Associates, co-authors articles for SRAR. The column represents SRAR’s views and not necessarily those of The Signal. The column contains general information about the real estate market and is not intended to replace advice from your Realtor or other realty related professionals.