California’s Exodus May Not Be Over

While some may have thought California’s exodus was over, new data shows large numbers of residents could be planning to leave the state in the next year.
More than 46,000 people were looking to move out of California between May and July of this year, according to recent Redfin data. Residents of Los Angeles and San Francisco took the first and third spots for top areas people are moving away from, based on a sample of 2 million Redfin.com users who searched for homes across more than 100 metro areas.
Nationwide, the housing market still appears to be a tough spot for buyers.
In July, prices were up 4.1 percent compared with last year, and the median price was $439,455. In California, prices are far higher, with an average home listed at $784,989, according to real estate website Zillow.
“While we’re starting to see inflation cool in many locations across the country, the reality is California, which has always been one of the most costly states to reside in, has seen prices remain stubbornly high, especially in housing,” Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek.
“In fact, whereas in many other major metro areas we were starting to see real estate prices see small declines earlier in the year, some cities in California surged to record highs,” he said.
For middle-class families who lived paycheck to paycheck before the pandemic’s inflation, it’s now considerably more difficult to keep your head above water, Beene said.
“With neighboring states like Arizona and Nevada having housing prices literally half the cost, it’s easy to see why many are trying to get out,” he said.
With California among the top states residents were looking to leave, the South had most of the hot spots for new movers: Florida, North Carolina, Arizona, South Carolina and Tennessee.
“For much of the population, the only opportunity to become a homeowner is to leave the state to a more affordable market,” nationwide title and escrow expert Alan Chang told Newsweek.
“I don’t see the market improving much for the next year. The slight drop in interest rates has helped slightly but still not substantially enough for many potential buyers to step away from the sidelines,” he said.
While over 46,000 California residents looking to leave might sound alarming, that is not so large of a shift considering the sheer size of the state, said Michael Ryan, a finance expert and founder of MichaelRyanMoney.com.
“California has nearly 40 million residents, so we’re talking about a small fraction here,” Ryan told Newsweek. “For years, California’s real estate has been like a pot ready to boil over.”
There are still many things California has going for it, Ryan said.
“The job market, especially in tech and entertainment, is unparalleled,” Ryan said. “I’ve seen folks leave for cheaper pastures only to come back because the opportunities just weren’t the same. It’s a classic case of you don’t know what you’ve got till it’s gone.”