California Emigration Surge?
Investor · Spokane, WA · Member since 2015 · 238 posts · 133 votes
Greetings,
I'm looking to hear people's thoughts and observations of a potential increase in numbers of people moving from California and how it will affect real estate in the locations where they relocate.I grew up in CA and now live in eastern Washington state where over and over I hear that the overwhelming majority of people moving into the area are from California. With the increase in wildfires, the high cost of living, and the increasing ability to telecommute, will less expensive and less fire prone areas soon see a surge of people moving from CA, thereby changing the markets in these relocation areas?
Greetings,
I'm looking to hear people's thoughts and observations of a potential increase in numbers of people moving from California and how it will affect real estate in the locations where they relocate.I grew up in CA and now live in eastern Washington state where over and over I hear that the overwhelming majority of people moving into the area are from California. With the increase in wildfires, the high cost of living, and the increasing ability to telecommute, will less expensive and less fire prone areas soon see a surge of people moving from CA, thereby changing the markets in these relocation areas?
Jesse, I have to point out one fact that gets overlooked: CA is HUGE. 1 in 8 Americans lives in CA. So any area in America experiencing population growth is going to see a lot of Californians.
I think of Boise, ID, where I hear anecdotally from friends that the city is flooded with Californians. Boise has a population of 228K. Californians birth twice as many people a year!
So a lot of people moving into anywhere will be from CA. The actual net out migration rate from CA to other states is under 0.5%, so as of yet, the much-hyped "California exodus" isn't a thing. And I wouldn't hold my breath for it, either!
Best,
Jon
Greetings,
I'm looking to hear people's thoughts and observations of a potential increase in numbers of people moving from California and how it will affect real estate in the locations where they relocate.I grew up in CA and now live in eastern Washington state where over and over I hear that the overwhelming majority of people moving into the area are from California. With the increase in wildfires, the high cost of living, and the increasing ability to telecommute, will less expensive and less fire prone areas soon see a surge of people moving from CA, thereby changing the markets in these relocation areas?
Jesse, I have to point out one fact that gets overlooked: CA is HUGE. 1 in 8 Americans lives in CA. So any area in America experiencing population growth is going to see a lot of Californians.
I think of Boise, ID, where I hear anecdotally from friends that the city is flooded with Californians. Boise has a population of 228K. Californians birth twice as many people a year!
So a lot of people moving into anywhere will be from CA. The actual net out migration rate from CA to other states is under 0.5%, so as of yet, the much-hyped "California exodus" isn't a thing. And I wouldn't hold my breath for it, either!
Best,
Jon
Hi @Jon Schwartz - I've seen you comment a few times on similar posts and I think you bring up some great points that people should keep in mind (particularly that CA holds a large portion of the US popultation and the population there is actually growing despite those who are leaving). However, I think there are a few things that should be pointed out.
Yes, CA is huge and it's not like everyone from the state is moving out - but there are still A TON of Californians leaving. While those of you who are staying put in CA may not notice much of a change, those of us that live in Boise and other nearby smaller markets certainly see a measurable difference. And it's not just anecdotal that there are lots of Californians moving to the Boise area (and other places in Idaho), there's plenty of data that backs that claim up (and that says it's not just CA, we're getting lots of people moving in from the Seattle and Portland areas as well). It's definitely changing the area, and not just from an investment perspective - so people are going to feel it and talk about it. And I don't see this ending anytime soon. As long as people feel that CA is overpopulated/crowded, restrictive, dangerous, or whatever reason people have for leaving, and as long people feel that they can have a higher quality of life that works for them in Boise, Spokane, Coeur d'Alene, AZ, LV, TX, etc. then we're going to continue to see these markets have a large influx of California transplants.
And just so you aren't getting me wrong, this is not a knock on CA (I've lived there for a couple years before and loved it - beaches, Disneyland, cool cities, mountains, sunsets, redwood forests, it's amazing and I can see why so many people live there!), and it's not a knock on people moving here from CA (they're great people and the growth they bring has a lot of positive impacts on the area) - it's just my 2 cents on the issue.
Hi @Jon Schwartz - I've seen you comment a few times on similar posts and I think you bring up some great points that people should keep in mind (particularly that CA holds a large portion of the US popultation and the population there is actually growing despite those who are leaving). However, I think there are a few things that should be pointed out.
Yes, CA is huge and it's not like everyone from the state is moving out - but there are still A TON of Californians leaving. While those of you who are staying put in CA may not notice much of a change, those of us that live in Boise and other nearby smaller markets certainly see a measurable difference. And it's not just anecdotal that there are lots of Californians moving to the Boise area (and other places in Idaho), there's plenty of data that backs that claim up (and that says it's not just CA, we're getting lots of people moving in from the Seattle and Portland areas as well). It's definitely changing the area, and not just from an investment perspective - so people are going to feel it and talk about it. And I don't see this ending anytime soon. As long as people feel that CA is overpopulated/crowded, restrictive, dangerous, or whatever reason people have for leaving, and as long people feel that they can have a higher quality of life that works for them in Boise, Spokane, Coeur d'Alene, AZ, LV, TX, etc. then we're going to continue to see these markets have a large influx of California transplants.
And just so you aren't getting me wrong, this is not a knock on CA (I've lived there for a couple years before and loved it - beaches, Disneyland, cool cities, mountains, sunsets, redwood forests, it's amazing and I can see why so many people live there!), and it's not a knock on people moving here from CA (they're great people and the growth they bring has a lot of positive impacts on the area) - it's just my 2 cents on the issue.
Brandon, I don't disagree with anything you're saying. I totally agree with you that rapid population growth changes places like Boise and Spokane in real, material ways. And it's worth talking about, but framing theconversion as "why is everybody leaving California?" starts the wrong conversation.
Look at it this way: Louisiana has more per-capital net out migration than California (source here), but you don't see any stories about the great Louisiana exodus. You probably don't see as many migrants from Louisiana in the Pacific Northwest and Idaho; I'm guessing people leave Louisiana for closer high-growth markets in Texas and Georgia. Pointing to wildfires in CA and predicting massive population growth elsewhere is, I think, confusing correlation with causation.
That's my 3 cent on top of the other two!
All the best,
Jon
@Bonnie Low yes that type of attitude directed at those moving in from out of state is not kind or productive. I wish people would just try to understand and accept the fact that things change rather than get nasty about it.
@Jon Schwartz agreed the fact that "The Great California Exodus" is even a thing that people talk about definitely throws some unnecessary and misunderstood shade on the state. And as Bonnie mentioned, it creates negative feelings towards Californians. We have however actually seen massive population growth in places like ID, and people from CA, Seattle, Portland, and places on the east coast account for a lot of that growth. I also think some of the natural bi-products that come along with living in a super populated place like that actually do correlate with the population growth we've seen here. All in all though, I'm totally with you that we should seek to understand the issue rather than make rash assumptions based off of things we've heard.
Yes, all the people moving from CA and other states has drastically changed the market. We purchased a duplex in CDA 2018 for around 200k, can't even find one now for less than $350k. Market is just as, if not more, competitive than here in San Diego - at least in the starter to mid- price point ($350k) My son moved to CDA two years ago and has been looking to purchase his first home there. He kept getting outbid by Californian's making all cash offers. He ended up buying a new construction home that will be done by the end of October. And now, we are getting ready to list his wife's parents home since they are moving to CDA to be near their kids! So add a couple more San Diegans to the population count. It's even worse since Covid. So many people are moving from Seattle and other areas since they can work remotely. Unfortunately, there is a lot of animosity towards Californians there. Definitely don't bring any blue state politics (move to Boise if that's how you swing) with you or at least keep it to yourself and get your license plates changes ASAP or risk your car getting keyed or worse. Through a Trump sticker on it if you want to survive! I'm not even kidding. Not saying I agree with that mentality, but it's the reality. We'll see how many move back to CA after they suffer through a few winters.
@Manco Snead I think it is important to understand the number of people moving to and from an area. This will give you insights into the long term economic viability of the area and can inform where you choose to invest. Regardless of where the new people emigrating from, I think the challenges are basically the same (increased demand, stress on infrastructure and services, etc).
The real question is how are you going to use this information to alter your investing strategy? Change is going to happen regardless and it's not something we can generally control. Therefore, I think the best strategy is to focus on the things that are within your control (market selection, asset allocation, investment type).
John
@Brandon Pelfrey - fun fact, my brother migrated from Seattle to Meridian because his company (Guckenheimer Foods) won the contract for food service at Scentsy, which is a huge employer in the Boise area, and they transferred him there to open the restaurants at Scentsy HQ. So yes, people are coming in to the area, which is inevitable with job growth. I would say overall that job growth is a great thing for any region and especially for us as investors.
@Bonnie Low I myself grew up in the Seattle area so I, too, am technically a transplant here!
I've lived here in Coeur d'Alene, ID most of my life and you are right that the general population of "locals" do not want the influx of people coming here from anywhere. Most people here are "transplants" and have every right to emigrate wherever they choose. I do agree don't move from a state with terrible politics and try to implement those here. That's the beauty of living here in the US. I have never heard of anybody's car being keyed for their political views (maybe by a select few if you find yourself with a trump sticker on your vehicle in a place like Spokane). You may get heckled by a local here and there, but the reality is the general population are the nicest and caring people you'll ever meet. Everybody just wants to live in peace. Most people even the ones who call themselves locals are originally from California who moved here 10-20 years ago. The market here is rocking and if you happen to own property you will benefit from the population growth. This area is absolutely beautiful and most can see the value of peace and beauty. I can definitely relate with how hard it is to buy a house in this market without cash. I am currently searching for my second home and it's dam near impossible especially if you want to find a good deal. The winters can be harsh but beautiful. If you're considering a new place to invest Coeur d'Alene, ID is definitely a good place to consider.
hi @Manco Snead - It certainly is having an impact in Boise. There is a shift like we've never seen, and I can see the appeal for so many, as I love living here! @Jon Schwartz You make some good points! @Emy Bernardo - North Idaho is gorgeous, and have family in Sandpoint and Spokane! Glad that you get to visit there! The winters are milder in Boise for sure, and we don't see a lot of clients reverting back South after making their lives here.
If you didn't know population of the US and density before covid, you should have some awareness now. There are roughly 39 million people in California, while New York State has 19 million, almost half of which are in New York City. RI, MT, DE, ND, SD, AK, DC, VT, WY are only 1.2 million or less in the ENTIRE state. Migration of Californians of course will have a big impact on anyplace where there is a big influx and a much smaller population. People bring their mindset and politics among other things. In 2018 691,000 people left California. It would be a disaster if they all came to just a few places. RI would be overwhelmed with increased housing and social service costs with even a fraction of that outmigration. That said they aren't coming here, they are currently going to TX, NV, and AZ. In those locations they likely already drive up housing costs by increasing demand. The influence on social climate may take a while. But these places aren't so far from California, this has been going on for a while and it has nothing to do with telecommuting and fires. You have fires in AZ too. I believe stats show that lower earners are leaving California because they can't afford to live there. Now fires may push some people over the edge just like hurricanes in FL and LA but it is the economic pressures and opportunities that push people into relocating. Just ask anyone you meet who has moved, why they do it.
@Manco Snead - I'm working with a lot of buyers who are moving from California. They are typically bringing their remote jobs with them and are qualified to buy above median home prices here in Spokane. However, most are looking to replicate/slightly improve their standard of living not buy a 10,000 sq ft mansion.
I'm seeing a lot of Californians pocketing a large portion of their equity from the sale back in CA and enter the Spokane market at the 250-500K range. This is forcing appreciation and leading to multiple offer situations.
Just my 2 cents.
I'm in Fort Collins, Colorado. In my neighborhood we have had 3 Southwest pilots (2 from San Jose, one San Diego) move into my NEIGHBORHOOD (just 244 houses) recently.
The exodus seems real. People in the know seem to be cashing out of California for a better quality of life. Lots of California (and Texas) plates around town. Not sure they know we have a proper winter here yet though! ;)
@John Barrett Thanks for the comments; that was my thought in asking the questions regarding California; how will this affect my market? If the numbers of people moving from California do increase where will they move to? As some have mentioned, Spokane, CDA, Boise. But will smaller communities become attractive as well? If I was a telecommuter I would certainly consider a smaller community; quieter, less expensive, generally safer. I'm just throwing out the speculative questions here, looking down the road.
Most people I know who have moved from California have done so for economic reasons; get a bunch of equity out of your CA home then buy for cash with money left over somewhere less expensive and with less traffic. I am originally from California, though I've never owned real estate there. Here in Spokane there is plenty of vilification towards Californians. And I get it, who wants a huge influx of people from a generally higher paying job market in their town?; increased market values, more traffic. I don't. But I'd probably do the same thing if I had the opportunity.
@Phill Wells The remote job scenario is a really fascinating one to me and seems that it could be a real game changer in certain areas. I'm thinking of certain small towns that have been kept small by their very limited job opportunities. This scenario changes with telecommuting.
One of my super wealthy relatives recently pulled everything out of CA and put it into WY. Just sayin'.
To lend some historical perspective to this discussion, when my wife and I arrived in Seattle in the summer of 1993 we were asked where we had come from and answered "Virginia." Universally, we were told "good thing it was not California. Too many Californians coming here. Seems like the whole state is emptying out and no one likes them."
True story.
California has grown by almost 25% (31.5 million to about 39 million) since then.
@Jesse Stein
if your town is seeing a “stampede” of sorts from people migrating from California, please ask them directly what led them to migrate.
More importantly ask them what they plan to do for work and if your geo is equipped to provide them well paying jobs or flourishing business opportunities. In the end people move for jobs and opportunity unless they are retiring.
I will leave the great outdoors & the weather from the equation. The bottom line is if people are moving the locals here in California are not noticing that. Real estate prices continue to remain stable and rising.
@Jesse Stein
Funny enough, we’re selling our house in Las Vegas and moving to a small town called Santa Maria in California. It’s about the same price as Vegas, perhaps a few percentage points higher per square foot. Our reasoning is that LA or San Francisco are way too expensive, there are a lot things to do within an hour from Santa Maria and the weather is great.
We see a lot if people moving to Las Vegas from California though!
People are citing a few drivers to justify the thesis of outward migration from CA. Let’s not deny that people are not moving but let’s not also not discount that many many people are moving into CA from the same states and from other countries. The latter of course is on hold due to Covid.
Until recently it was “high cost of living”. In the past months the list has grown to “remote working”. Last week the list expanded to “wildfires”. Anything to prove that California is on a decline! Especially from folks who don’t live here.
California always has had higher cost of living which has been supported by its status of the “Golden State”, land of umpteen opportunity for wealth creation, Job creation and business creation making it the fifth largest economy in the world. The driver here is job and wealth creation. If those two drivers are going away, then outward migration will rise. As of now given the massive increase in tech and tech related businesses, that does not seem to be the case. If anything people continue to move to and want to move to California in pursuit of the next big thing. People want to invest provided they can afford to invest. The bar is high and understandably not everyone can invest.
As for remote work. People ought to read the recent news on a many firms explicitly saying that they will adjust salaries if employees moved to cheaper locations. So that will deter many techies from moving.
As for wildfires !!! How should I think about a couple of weeks of wildfires (that impacted the entire western part of the US) vs the HARSH winters, Hurricanes, Tornadoes etc that ravage many states half a dozen times every year.
Lastly people who are seeing “mass migrations” into their geo from ex CA residents need to ask the big question if their geos can accommodate these new residents and support them with jobs and business opportunities. Otherwise the migration will only line up the pockets of a few brokers and cause inflation in local markets. I know of 9 families who moved to Austin and then moved back to CA citing weather and lack of career mobility. Austin btw is a very robust tech hub but still cant offer enough.
@Aleejandro Dela Vega. Welcome to Santa Maria!
@Aleejandro Dela Vega - Yes, welcome to SBC. There is a lot of great things to do within an hour of SM. SM also has the better investment opportunities in SBC when it comes to getting close to cash flowing.
Since Covid, I'm seeing a tremendous amount of people coming into San Diego right now from other high priced tech areas.
The Bay area and the rest of the Pacific northwest. NY, Philadelphia, Boston, DC, etc..
As a result, we've had about 7.4% appreciation county wide just in the last 2 months. This is also due to our extremely low inventory (1.5 months) and the low rates.
California is great for people selling homes here. Prices have doubled or so in 5 years and a bigger part of it is CA migration. 2 problems though:
1. When you go to buy your paying higher prices now.
2. The long run and I have already seen they are changing the policies of state. So I guess if there is any Montana people on this tread watch out because we will eventually be coming there as it is more and more difficult to conduct business prices become more and more unaffordable for working folks.