People are moving into and out of these states.....

17 Replies

according to United Van Lines:

Biggest inbound states:

OR

SC

NC

VT

FL

NV

TX

DC

OK

ID

Biggest Outbound states:

NJ

NY

IL

ND

OH

KS

NM

PA

CT

Most balanced states with same in as out bound:

RI

NH

WY

TN

CA

WA

H0w does that affect your real estate investing?

Thank you David for the update;  Good to know this as it could be a game change for investing....

your state as well as mine made the outbound state list, does that change your investing plan?

@David Krulac  

Interesting stats! It would be necessary to take a closer look at each independent economy to determine the how and why of what is causing the population growth, migration or 'stability' before determining where to invest and the best strategy for that market.

In Washington State, we have seen a large shift of SF Bay Area companies relocating to our area. However, this growth is centered in the metro areas while a majority of the state remains unaffected and untouched. What I do see happening is long-term residents being priced out of their market area. One of the factors that influenced the relocation of Bay Area companies was the comparative affordability of Seattle. As a result, there has been a sudden influx of individuals making healthy salaries that price the average worker out of the area, thus pushing other residents out of the state. If you combine these numbers with the average people who relocate in any given year, I can understand why our state shows balanced growth. However, I highly doubt that is indicative of our average household income, especially in the Seattle Area.

Is Seattle a good area to invest in? Yes. Would it be an appreciation play? Most definitely. However, I would look elsewhere for fast cash.

It will be interesting to see what others say about this data!

I read an article the other day that Cali was losing its poor people at a rate of 250k per year. Apparently the California folks leaving nearly all of them made under 50k. Here is where they are going. 

California in most balanced list I doubt that. I just read an article couple of days back which says that outbound flow of people is more in CA than inbound.

I'm glad to see SC on the "inbound" list - I'm one of those very people migrating there!  In my research I've seen that the population in the upstate SC area has been climbing steadily over the last several years - even exceeding growth projections.  It's nice to get further confirmation of that.

Originally posted by @Sid Arora:

California in most balanced list I doubt that. I just read an article couple of days back which says that outbound flow of people is more in CA than inbound.

This is correct however most articles I have read leave out net foreign migration which puts Cali at a net population gain of 6 figures plus annually. 

Originally posted by @Matt R. :

I read an article the other day that Cali was losing its poor people at a rate of 250k per year. Apparently the California folks leaving nearly all of them made under 50k. Here is where they are going. 

 I think it is quite a bit more nuanced than that.  You are losing plenty of better-off people as well.

http://www.manhattan-institute.org/html/cr_71.htm#...

No doubt all shapes and sizes leave. It is just the vast majority made under 50k. I don't have the percentages handy but I think it was over 90% made less than 50k. It makes sense as to reflect cost of living challenges compared to TX, AZ, NV etc...where you can buy a decent house on 50k as opposed to paying 2k a month for a 1 or 2bd apt in LA.

And @Richard C.  

 of those states you list as having an influx of poorer folks, SIX of them have a net outbound population.  Interesting.

To further the 'lift and shift' discussion, WSJ had an interesting article on the young driving an urban rebound.

Link:

http://www.wsj.com/articles/young-drive-an-urban-rebound-1420250736

This is still relevant to @David Krulac  original stats on the moves as there may be a relationship to those states seeing an influx with cities there. 

I can only speak with some knowledge about Philadelphia and the surrounding area.  We are a Meds and Eds city where not much changes, particularly office rents.  However, construction expenditures are projected to be in the $4-$5 billion (yes with a 'B') over the next 5 years.  Over half of which is just from the medical/education side (CHOP, UPenn Health, Temple, Drexel, and surrounding suburb schools).  While Philadelphia has seen an increase in population over the last decade, PA and Philadelphia has struggled to keep those graduating from staying in the state.  Part of the problem (noted in RE and business forums here) is the state of the primary educational system and the high cost of the business tax (including the additional wage tax on employees). 

I'm not sure that it changes my RE investing.  Just confirms that I need to understand my locale and how its trending. 

I am seeing the areas closer in hot as a tamale and the outliers cooling off considerably. Even comparing North Hollywood which is partially gritty still vs choice A+ high end further out suburbs. Many new buyers want nothing to do with the traditional highly rated suburb outliers now. The trend seems to be escalating quickly and is reflected again today in DOM at the same price points and in the average age of home owner at near 50 vs mid 30s for closer in properties. 

Originally posted by @Matt R. :

I am seeing the areas closer in hot as a tamale and the outliers cooling off considerably. Even comparing North Hollywood which is partially gritty still vs choice A+ high end further out suburbs. Many new buyers want nothing to do with the traditional highly rated suburb outliers now. The trend seems to be escalating quickly and is reflected again today in DOM at the same price points and in the average age of home owner at near 50 vs mid 30s for closer in properties. 

 If you read the study I linked to, you will see that even in SoCal, the actual numbers do not support that hypothesis.  A considerable amount of migration in CA is away from the coast, but still within the state.

I've been reading about the New Urbanist wonderland that is "just around the corner" for 30 years now.  I'll believe it when I see it, and not a moment sooner.

The Boston market is famously in-demand, right?  Well-off city, young people, universities, tech jobs, trendy clubs, arts scene, etc, etc, etc.

The hottest real estate market in Massachusetts in 2014?  Melrose.  A deeply uncool surburb of 26,000 people.

I am speaking from an anecdotal micro LA,CA place. If you are looking for something in North Hollywood you better act quick is my take. For Boston or another hot tomale location IDK what is going on locally is accurate. Typically, the Cali trends migrate to all 50 states eventually is what I have seen but sometimes it takes decades for that to happen. There was a time in LA the outliers were in more demand. Imho that trend is in full reversal.

The Public Policy Institute of California has some great information on population growth and dynamics in California:

http://www.ppic.org/main/publication_show.asp?i=25...

Over the past 20 years, California has experienced its slowest rates of growth ever recorded and an unprecedented migration of residents to other states. From 2000 to 2013, California

Anecdotely, I hope to be making an offer this week on one of the highest end outlier locations in LA county/nation. MEDIAN list is 1.78 mil. If that property was located closer in it would have been sold in hours already and with multiple cash offers. I am going against the trend on this one but I feel that the stable highest end rents and schools will make it ok. The reality that it is even available after nearly 6 months on the market is totally unheard of vs the closer in areas. My thoughts are this is a 1 out of 1000 overlooked value exception or I would not be offering full price. The fact that I might get this one without competing with cash buyers is just a bonus...and remarkable for the LA area. If it goes down I will report back with details. Unfortunately it won't be easily duplicatable but there is always a chance...

It is interesting that many of the states with the largest numbers of people leaving per the United Van lines list are some of the most heavily taxed states in terms of the combination of income taxes and property taxes (NJ, NY, IL, OH, PA, CT).   Most of the major inbound states have lower taxes...3 of them having NO income taxes (FL, TX, NV) and ID, SC, OK having low property taxes but mid range income taxes.

I can't believe that VT is a high inbound state:)

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