People are fleeing California, are you?

311 Replies

It’s funny there are people in other states complaining about Californians and /or New Yorkers moving in and making housing prices go up .

But here in SoCal locals compete for housing with people from New York , ‘Midwest , the rest of the country and then the very wealthy from China and the rest of the world . They are both living here and investing here . Good if someone bought a home years ago and looking to cash out but not for those looking to purchase .

Same thing in the Bay Area . Median home price in San Francisco is $1.6 million .
Double the price 5 years ago .

Only 12 percent of SF households can afford to buy a home there .

The surrounding areas are also very expensive too .

I think the bigger picture isn’t that the state is going to necessarily going to lose population or home prices will decline with bigger government and more regulation. Instead your going to see a change of demographics, with more rich and poor, and less middle class workers residing in the state.

Remember socialism is great for the rich and explains our last 20 year trend of compression of the middle class. This is why mean income has increased, , but medium income has been stagnant. We should continue to see a net exodus of people leaving California with incomes of 50-80k especially those with family’s

I don't live in CA and never have, but, my son went to school there and married an LA girl. They lived in Santa Barbara for six years and paid an exorbitant amount for a 2 bd. apartment. They are middle class and moved to Omaha 5 yrs ago. Within 3 months of moving here they bought a 5 BD house and pay less on their mortgage than they paid for the Apt. in SB. They also now have 6 SFR and live a more affordable lifestyle. Do they miss the weather/beach/sailing in SB -yes, but, they have a life they could never have if they had stayed.

@Steve B.

50-80 k is rock bottom in Bay Area, not middle class at all. Police officer here makes much more than that.

Higher income is associated with higher cost of living.

We have people commuting 1.5 hr one way to work in the Bay Area. Elsewhere, no jobs or lower income for same job.

Originally posted by @Steve B. :

I think the bigger picture isn’t that the state is going to necessarily going to lose population or home prices will decline with bigger government and more regulation. Instead your going to see a change of demographics, with more rich and poor, and less middle class workers residing in the state.

Remember socialism is great for the rich and explains our last 20 year trend of compression of the middle class. This is why mean income has increased, , but medium income has been stagnant. We should continue to see a net exodus of people leaving California with incomes of 50-80k especially those with family’s

Steve I was just at Google headquarters yesterday in Mt. View.... its INSANE whats happened to the place i grew up Cupertino Sunnyvale 

etc. modest homes in Mt. View are now reaching 2 million.. same home in Beaverton would be 400k.. and 10 years ago would have been 250k.  prices go up there they go up in PDX metro..  but those with the 50 to 80k income they Must go where there are jobs.. 

I was giving a talk at Google yesterday on Alternative real estate investments.. IE every kind of real estate expect RENTALS they pretty much understand how those work.. 

And that was one of the main questions was where is the marketing going and can it go higher.. 

Well I thought about that.. and  well in the 80s the market made a high.. Not sure what it was in PDX Metro probably mid 100s or so.

then in the 90s is makes a new high at mid 200s or so..  then in 2000s it makes a new high at 300k or so.

and now in 2010s we are making new highs.

When i grew up in CA.. my parents paid 35k for their home in cupertino.. which today is probably 2.5 mil or better and its nothing spectacular 2 story 3 and 2  2200 sq ft..  but the bay area has done the same thing every 10 years so or it makes  a new high then goes higher.  Seattle same thing. I remember when i was selling real estate in the Bay area my seattle clients could not give there homes away in the middle 80s.. 

So the question was how high can it go.. well I guess it can make new highs why would it not..  A lot of these folks that live there have doubled or tripled their money in the last 10 years simply owning a home there.. they sell make 1 million or more then they can buy that 3 million move up.. ?

I was at lunch in Hillsboro OR  with my banker and we were talking about my new homes i am building out in Gresham that are selling for 450k or about 200  FOOT.. He could not quite understand who is buying these.. I told him though 3 out of 23 went for cash.. 

and with the way rents have gone in PDX 20% down payment is same as rent.. so why rent.. and pay some else s home off. 

Anyway If I was like all these Googler's  thats what they call themselves.. I would dig working there.. its AWESOME.. the food and coffee bars is all TOP shelf and all free.. you can bring your dog.. no dress code.. And wages there allow these folks to buy 1 to 2 million dollar homes in their areas.. especially if two googlers are married or combining incomes.. its a no brainer for them.. So if you want you would basically never have to buy food during the week when you work there .. it was JUST too cool for words

@David Song , I recently saw that Sacramento is the #3 city millennials are moving supposedly . It makes sense especially for those that have a family .
Looks like you can get 3 bed house for around $300k or so .

Unemployment rate there is 3.9 percent now not like 2009-2012 when it was like 10-13 percent .

Lot’s of government jobs that pay decent with good benefits .


Millennials are flocking to California's state capital, a new study found.

Sacramento was the third most popular destination for those ages 20 to 34 in 2016, behind Seattle and Columbia, the capital of South Carolina, according to analysis of U.S. Census data by investment site SmartAsset.

https://www.sfgate.com/expensive-san-francisco/article/sacramento-housing-millennials-moving-migration-12973230.php

@Joseph M.   Bay Area folks started this migration to Sacramento when the first run up came in the middle to late 80s.. 

and it never stopped...  thats why the foothills of the Seirra Nevada have boomed..

@Jay Hinrichs that’s cool!  I was born and raised in California and worked at Sun Microsystems in Santa Clara right before the Dot-Com crash.  I found the area way too plastic and prefab for my tastes so I moved to the bucolic and pristine PNW.  15 years on we are now experiencing much of the same thing in Portland as you well know, so I just recently bought a house an hour outside of Portland which I feel is right on the path of string appreciation and temporarily allows me to escape the displaced Bay Area invaders 

• Have you lived in California in the past 5 years?
Yes, 18 years.

• If so, where?
Bay Area, San Carlos

• Will you be staying or leaving? 
Leaving. Heading to Seattle Area.

• Why?
People that move to Bay Area come here to play the startup lottery. They are educated, alright, but don’t seem to care about anything other than money. There’s genetic diversity for sure, but a total lack of thought diversity. Everything revolves around tech, and the tech industry has been building inconsequential and unsustainable products for over a decade now. Which affects people’s satisfaction with their lives. The area itself is poorly developed. It’s neither a big metropolis, nor a rural expanse. It’s crowded and dull.

• What is your full time income producing job? 
Engineering Manager at a tech “unicorn”.

I think it’s a mistake to think that it’s only the people who can’t make it here that are leaving. And that they are being replaced by the highly educated and successful. Though I’m sure it’s flattering to think that way if you’re staying. :) And there ARE plenty of opportunities to make it big here. But it’s simply not about money, it’s about life.

A good friend of mine, who was born and lived here all of her life until a few months ago, who is a very successful lawyer, is into outdoor sports on one hand, but is also a club-going urban dweller on the other, and who recently moved to Seattle, summarized the Bay Area the best, in my opinion: there’s a lot of everything here, but everything is either shallow, mediocre, or so overcrowded that it’s no longer accessible or enjoyable (e.g.: Yosemite).

Originally posted by @Steve B. :

@Jay Hinrichs that’s cool!  I was born and raised in California and worked at Sun Microsystems in Santa Clara right before the Dot-Com crash.  I found the area way too plastic and prefab for my tastes so I moved to the bucolic and pristine PNW.  15 years on we are now experiencing much of the same thing in Portland as you well know, so I just recently bought a house an hour outside of Portland which I feel is right on the path of string appreciation and temporarily allows me to escape the displaced Bay Area invaders 

 did you buy out in Yamhill county ???   Google was off the charts cool.. but then again I am easily impressed :) and MR. Blue sky for sure.

@Jay Hinrichs  no,  I pursue a cheaper housing sector than you deal with, however the appreciation figures are about the same in my markets as Yamhill.  I’ve been buying in Columbia, Skamania, and Tillamook  county’s.  I find clackamas, Washington, and Yamhill a little too popular already for what my specific market strategy is 

Originally posted by @Steve B. :

@Jay Hinrichs  no,  I pursue a cheaper housing sector than you deal with, however the appreciation figures are about the same in my markets as Yamhill.  I’ve been buying in Columbia, Skamania, and Tillamook  county’s.  I find clackamas, Washington, and Yamhill a little too popular already for what my specific market strategy is 

 got it I like Klickatat as well that's under the radar..   and pretty nice weather..  we did real well in Hood river but its expensive as you know

@Jay Hinrichs agreed, but I should stop detailing this thread. But just to prove the power of “forced appreciation” in our area have you looked at Longview recently? No offense, but does anyone WANT to live in Longview?

I do feel good for Michele Fischer as it give a beleaguered landlord a unexpected and profitable exit plan

Originally posted by @Steve B. :

Jay Hinrichs agreed, but I should stop detailing this thread. But just to prove the power of “forced appreciation” in our area have you looked at Longview recently? No offense, but does anyone WANT to live in Longview?

I do feel good for Michele Fischer as it give a beleaguered landlord a unexpected and profitable exit plan

 my wife owned a c 21 in longview for years and she is from Puget island  / cathlamet so yes we are there often.. and we inherited some rentals there .. low end very drug infested.. but the sprawl effect right ??? 

Originally posted by @Sam Josh :

@ Roger Steciak.

It’s not different this time except that we are bouncing off the deepest recession in modern times on the back of low interest rates and heavy doses of QE. Bluntly those apply just as much to other parts of the country as they do to the Bay Area. The Bay Area is benefiting from all that stimulus plus the digitization of the world. That won’t of course last forever and new trends will take over.

As for “peak tech”, we have see that happen over and over again. For example, In the early days the world wanted to go work for FairChild Semi. Then it was the likes of 3Com and Sun Microsystems and HP that were the hot companies oh also there was Silicon Graphics, Siebel Systems, Peoplesoft and Sybase. This era was replaced by the likes of eBay and Yahoo who were then pushed aside by the likes of Google, Apple, Facebook and Salesforce.

So if you notice there is a difference here between a rapidly innovating and disrupting tech ecosystem model we have here in Silicon Valley versus what we have in the great city of Detroit where we had 3 automobile giants who refused to innovate.

So I will buy into the bubble and the recession but I don’t think that the DNA of the valley matches the DNA of Detroit as a fair comparison.

I would like to say if you go far enough back in history, the early days of the automobile industry in Detroit were not that much different from the early days of the technology industry in Silicon Valley. Henry Ford was just as disruptive and innovative back then as Steve Jobs was throughout his career. The 200-year history of technology investing is covered in the book Engines That Move Markets (SPOILER ALERT: retail investors collectively have always lost money on tech IPOs).

The old American joke is that when an industry is young, it wants the rules relaxed so it can more easily take business away from the dinosaurs that are holding back innovation (remember the 1984 Apple Super Bowl commercial that attacked IBM?). But once this new industry becomes the established industry, it wants rules put in place to prevent the newer upstarts from destroying the "quality business practices" the older upstarts worked so hard to establish.

Today, intellectual property protection is held in high regard in Silicon Valley. But back in the 1970s, intellectual property rights were considered a joke, documented in the book Silicon Valley Fever. People would quite their jobs, work for a couple of competitors, and end up back at their original company 18 months later at twice the salary they had when they left (the industry buzzword back then was "cross fertilization"). Then in the 1980s, some IP lawyers were able to convince some high-tech CEOs that IP was a valuable asset worth protecting (remember when Intel sued AMD in the 1990s over the 386 and 486 microprocessors?).

Today, we're starting to see some push-back from government about whether the tech giants are too big. This trend is not to say Silicon Valley is going the way of Detroit (at least not any time soon), so enjoy the party while it lasts. It took Detroit decades to finish falling off its cliff, but maybe Silicon Valley has found a way to disrupt this pattern. DNA does mutate.

Do you live in Cal: I live in California currently and have lived here since 2003. 

Where: I've lived North of Sacramento, then Orange County, now Redlands. 

Are you leaving?: I'm planning to move to a suburb of Ft. Worth once I sell my house here. 

Why: It isn't because I disagree with the politics or the government (although I do) or anything like that. It's just that I have a 3k per month mortgage here and with the equity in my home I could go up in house slightly and own my home outright in Ft. worth. Also the schools have significantly better ratings on great schools and I'm in a good school district here. the local highschool here was 43%, and the district we're looking at moving to is 96%. Plus there are the tax perks and all of that. 

Income: Full time income was 250k, but my wife stays home with our daughter now so its 150k going forward. That's also a part of the reason for the move. 

Great poll @Karen Margrave

@Trevor Lohman I was in Dallas for the first time in March. If I ever left California I think Texas would be the place for me. I was impressed, it’s a great city.

  • Do you live in California? Yes, in Fremont, CA
  • Have you lived in California in the past 5 years? I was born in raised in Fremont, but I went to school in Phoenix, AZ
  • If so, where? 
  • Will you be staying or leaving? Staying since I live at home. 
  • Why? I could rent a nice class A apartment for about 2k-3k with a roommate. I could invest in other market places that produce higher yields. I wouldn't want to live anywhere else, except maybe NYC 
  • What is your full time income producing job? I work for a telecom company for the time being, but I'm extremely open. 

The trouble with the bay area is since the housing stock is so old, but it's such a desirable place to live. A lot of foreign investors are coming in and paying cash, also driving down yields. The rates going up means the cost of capital is increasing. Plus at these current prices, you can't buy for cash flow. 

Do I think it's going to be consistently bullish? No, I think there will be a market pullback maybe in 2019 or 2020. I'm looking at the London and Sydney markets of 2016. 

"What goes up, must come down".  

Forgot to mention that my company is headquartered in Dallas. That makes a big difference of course! One less variable to worry about. I like it too @Jonathan Hulen . Ft. Worth is a little more my style, but I like them both. 

I think my wife and I would like to stay, but there's something pretty appealing about being able to go from us both working to only one of us working with pretty much no lifestyle change. 

We'll see! It's not set in stone yet, but we're meeting with a realtor tomorrow. If we can sell for 200 more than we paid it'll be a done deal. Anything less and we'll have some tough decisions to make. Wish us luck!

Originally posted by @Trevor Lohman :

Do you live in Cal: I live in California currently and have lived here since 2003. 

Where: I've lived North of Sacramento, then Orange County, now Redlands. 

Are you leaving?: I'm planning to move to a suburb of Ft. Worth once I sell my house here. 

Why: It isn't because I disagree with the politics or the government (although I do) or anything like that. It's just that I have a 3k per month mortgage here and with the equity in my home I could go up in house slightly and own my home outright in Ft. worth. Also the schools have significantly better ratings on great schools and I'm in a good school district here. the local highschool here was 43%, and the district we're looking at moving to is 96%. Plus there are the tax perks and all of that. 

Income: Full time income was 250k, but my wife stays home with our daughter now so its 150k going forward. That's also a part of the reason for the move. 

Great poll @Karen Margrave

and your climatized to HEAT  .... !!!    thunder and lightning and golf ball hail will be new though

also watch out for foundations when you go down there.. ASK very pointed questions about foundations and soil

Have someone during your home inspection do a thorough foundation review..  Dallas area is full of expansive soils.

Originally posted by @Steve B. :

@Jay Hinrichs exactly the “sprawl effect”.  I wouldn’t buy in an area I wouldn’t want to live but renters and buyers are getting pushed up there.

Yes Hood River and White Salmon have already popped for sure 

I forgot i have a rental in Cathlamet.. its a junker but it perks along just fine..  I am thinking now might be a good time to sell it.. then will be down to one last rental in the mid west..

Originally posted by @Roma Whyte :
@Jay Hinrichs you forgot you had a property like other people forget they had a certain Tupperware container.

When I grow up I want to be like you.

its not a prize possession and so not one I covet or think about 

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