Leaving California

Here’s a less-hysterical article about people leaving California – it seems about 28% have been wanting to leave for years, and only 13% have done it. An excerpt:

Berkeley pollsters found 24% of voters had given serious consideration to moving out of California with another 28% giving “some consideration” to such a relocation.

The state’s high cost of living and its political divide were clearly on display in this survey.

Let’s remember, it’s easy to say you’ll leave, especially to a pollster. It’s another thing to pick up and go.

And “I’m moving” talk is up nationally, by one yardstick. Gallup pollsters found 16% of Americans in 2017 and 2018 said they’d permanently leave the U.S. — if they could — up from 10% to 11% seen in the previous two decades.

So how does California crankiness grade on a national scale? Sadly, there’s not a lot of comparable data.

Let’s not forget that on a national scale, the state has a young population. Young people move more frequently, but they are also the future.

Consider a 2015 national poll by Gallup that found 28% of California adults surveyed agreed to the statement “they would like to leave their state if they had the opportunity.”

But that level of unease was mid-range discontent on the countrywide scale: California tied with five states while 21 others had lower shares of residents pondering an out-of-state relocation.

Historically, a small slice of Californians move out of the state compared with the rest of the nation.

Census stats show 4.8 million Californians moving to other states from 2010 to 2017. Yes, that’s 13% of the state’s population in eight years — but it’s also the lowest share (yes, LOWEST!) of exits of any state and nearly half the nation’s 18% rate of state-to-state movers.

Plus, the five big metro areas with the largest increases in length of homeownership between 2019 and 2009 were from California: Ventura County, San Jose, Los Angeles-Orange County, Inland Empire and San Francisco.

Other views

Californians still give their state a high grade. The Berkeley study also replicated a long-running Field Poll question about Californians’ view on the state’s quality of life.

Pollsters found 50% of Californians thinking the state was “one of the best places to live” tying 2007 with the highest score since 2000.

And California looks dreamy to many Americans.

US News & World Report’s annual “best places” rankings include a survey of dream locations to live. Five California locations made the Top 25 this year: Salinas (No. 24), Santa Barbara (16), Los Angeles (11), San Diego (5), and San Francisco, in a four-way tie for No. 1.

Link to Article


Hat tip to CB Mark for sending in this article on Boise, and the California exodus:

An excerpt:

Idaho’s capital—from the city of Boise itself to the surrounding towns that have shifted from farmers’ fields to subdivisions over the past few years—is in the midst of a building boom. While Boise’s economy has been attracting new residents, much of the boom is fueled by migration from others trying to escape expensive coastal cities out west. Even so, the specifics of these moves don’t map exactly onto the stories we tell about who is leaving the coasts and how they’re changing noncoastal cities.

It’s instructive to look past the construction and zero-in on the type of housing being built to get a better sense of what is driving this growth, according to Phil Mount, Boise’s regional realtors president. A lot of the new construction he’s seeing around towns like Eagle and East Boise could best be described as nice single-level homes—with a few added touches, including low-threshold doors that are easier for owners who are disabled, spacious hallways, wide showers, and maintenance-free features. These are easy-to-live-in homes in neighborhoods with clubhouses and walkable access to stores. They are perfect places for older, wealthier retirees to spend their golden years.

“I just had a client, a 70-year-old widow from Northern California, Darolene Mullin, who came out here because she didn’t like what was happening to her home, and the lifestyle here suited her,” he said. “She’s in the area affected by the blackouts (due to fears that downed power lines would spark wildfires), and just decided that Boise is where she’ll spend her retirement years. It’s so much easier here.”

In California, a significant number of older homeowners are hitting retirement. State residents over 65 years old made up 18 percent of the population, a group that grew by 3 percent in 2018 alone, and 80 percent of the baby boomers in the state own their homes. That’s a lot of potential for downsizing and moving out. California citizens aged 65 to 75 are also the most likely of any age group to own property. Some analysts have even said the rush of boomers downsizing will create a shadow inventory” of housing that will help alleviate the great shortage of starter homes.

These homeowners are feeling an additional push to leave the state thanks to the recent tax reform and the SALT exemption repeal, which increases the tax bill for homeowners. According to Dan Walters, a researcher with the state think tank CALMatters, there’s been a rush of retirees or near-retirees making the move to neighboring low-tax states such as Arizona and Nevada. Researcher Joel Kotkin found that a majority of Californians expected to leave the state in the next 10 years.

These older former Californians have also zeroed in on Texas. According to the Economist, a quarter of those moving out of the Golden State between 2007 and 2016 have relocated to Texas. A city employee in Plano, Texas, who had been helping dozens of new arrivals apply for drivers’ licenses, joked that “Everyone is from California. Are they kicking y’all out?”

The main movers are middle class

But the scapegoating of rich Californians ignores many of the facts about who’s really moving. In a survey of economists taken by the San Diego Union-Tribune seeking insight into the state’s retirement climate, the consensus was that older and wealthier residents had more reasons to stay (and California has been a magnet for residents moving from similarly expensive states). Proposition 13, the state ballot measure from 1978 that froze property taxes for long-time homeowners, is a massive subsidy for the wealthy (it saved homeowners an estimated $7.4 billion last year alone).

The working middle class are “fleeing the state,” according to Kelly Cunningham of the San Diego Institute for Economic Research, due to the state’s “dysfunctional nature.” A large part of the problem is housing; per Zillow, the average house in California has risen from roughly $300,000 in 2012 to $550,000 today. Los Angeles, Riverside, and San Bernardino counties have seen massive outflow of residents over the last few years. California is becoming stratified, a statewide gentrification that is holding back economic growth and leaving the vaunted California lifestyle “available to an increasingly select few who can afford it.”

Public sector workers from California have long sought greener, cheaper pastures. According to a report by the Sacramento Bee, 15 percent of the 561,000 pensioners in the California Public Employees’ Retirement System live outside the state. Cops and firefighters have clustered in Grants Pass and Lake Havasu City, Arizona, and other state employees can be found in Nevada, Oregon, Washington, and Florida.

“Compared to California, Las Vegas was a no-brainer,” Joe Beck, a former Southern California school district maintenance administrator who moved to Las Vegas, told the Sacramento Bee. “I decided that if I could handle the heat three months out of the year, I needed to move to where my retirement check would be tax-free.”

Vegas, which is close enough for an afternoon jaunt back to Southern California, also offers plentiful sunshine, lots of activities for seniors, and the same single-family-home-style subdivisions that retirees had back home.

The national challenge of finding affordable housing is having a trickle-down effect everywhere. And if Boise is any indication, few cities are adequately preparing for shifting populations and new migrations across the country.

Link to Article

Zillow Home Buyers Report 2019

Understanding the housing market requires in-depth knowledge about the participants. Each year, Zillow surveys more than 10,000 market participants — homeowners, buyers, sellers and renters — to learn more about them and gauge their attitudes and behavior. Here’s a small slice of what we know in 2019 about home buyers, defined as households who have purchased and moved in the past year.



The Ennis House Sells

Hat tip to Susie for sending in the article about the Ennis House selling for $18 million:

Link to Article

Since last week, when Frank Lloyd Wright’s iconic Ennis House sold for a record-shattering $18 million — far and away the most ever paid for a Wright-designed home — curious minds have wondered who would buy such an idiosyncratic and outrageously high-maintenance compound for such a lofty sum.

Perhaps surprisingly, property records have now cleared and they show the house was acquired by an entity easily linked to a seasoned former PR executive named Cindy Capobianco and her environmentalist/philanthropist husband Robert Rosenheck, the founders of marijuana juggernaut Lord Jones, a luxury beauty brand that sells cannabis-infused body lotions, gels, gumdrops, bath salts and cosmetics.

Two months ago, after just four years in business, Lord Jones — which was the first cannabis brand to be sold in Sephora, Equinox and other high-end locations — was acquired in a $300 million deal by the publicly-traded Cronos Group.

After receiving that mega-millions business lottery win of sorts, Capobianco and Rosenheck wasted little time in investing a portion of the big score into their cinematic Mayan Revival new residence. Designed by the elder Wright and built by his son in 1924, the internationally famous structure was hewn almost entirely from 27,000 decomposed granite blocks and has been featured in numerous Hollywood productions — perhaps most notably, in 1982’s “Blade Runner.”

The Ennis House endured severe structural damage during the 1994 Northridge earthquake, and it slipped into a state of disrepair that continued until 2011, when it was purchased for $4.5 million by supermarket billionaire and noted architecture preservationist Ron Burkle, who commenced a years-long renovation and restoration of the premises. Last summer, amid a massive wave of publicity, the upgraded property was put up for sale with a sanity-defying $23 million pricetag.

Although marketing materials stated that Burkle invested “nearly $17 million” into renovations for the property — meaning the $18 million sale price represented a multimillion-dollar financial loss to his pocketbook — a Burkle associate clarified to Dirt that the $17 million figure included $6.4 million in a FEMA grant and a $4.5 million construction loan received by the Ennis House Foundation to fund structural stabilizations. In actuality, it would appear Burkle walked with a substantial profit on his labor of love.

Guests to the Capobianco-Rosenheck-Ennis House can light up in either the monolithic masterpiece’s main house or its detached guesthouse/garage combo, which total up to more than 6,000 square feet of living space. From its vantage point high in the Los Feliz hills, the compound sports jetliner-like views over the basin below, and head-on vistas of the Downtown L.A. skyline.

Link to Photos

NSDCC End of Selling Season

I was talking to Nick yesterday about the current market conditions, and how home sale have been affected by the low mortgage rates recently.

You can see in the graph above that over the last five years we’ve been accustomed to rates in the threes, so it seemed obvious that when rates almost hit 5% that a market slowdown was in order.

Likewise, wouldn’t sales pick up as rates came back down?

But interestingly, in another statistical quirk, sales this year are the same as last year:

NSDCC Detached-Home Sales, August 15th – October 15th

# of Sales
Avg $$/sf
Median SP
Median DOM
Sept 30yr Rate

Last year when sales were plunging 8% (again), it was easy to blame it on the higher rates. But as rates settled down this year, the best we can say is that sales have flattened out.


  1. Higher pricing is offsetting the lower rates.
  2. Buyers expect rates in the threes. Rates would have to get into the 2s to create a surge now.
  3. Not many homes for sale provide a compelling value to buyers (either the house or price is wrong).

The lower rates this year have provided that mythical soft landing that no one thought was possible. It is giving sellers and agents a sense of security that higher prices are supportable. But wouldn’t rates have to keep going down further for prices to go any higher?

If rates and pricing stayed about the same, the market should plateau along.

But can sellers resist adding that extra 5% on top of the last sale comp?  Probably not.

We’ll need an Election Year Miracle for prices to keep rising in 2020!

No Mistakes

Remember before the last crash when buyers and sellers were far more cavalier about their real estate decisions?  Why was that?  Because if they needed to move again, there were always a reasonably-priced house down the street or around the corner for sale.

But things sure have changed.

Selling/buying/moving is no longer just something you do casually.  Because of the difficulty, you are probably only going to move if, and when, you decide to make a permanent lifestyle change.

Look at the differences just since this blog has been around:

NSDCC January through September:

Year #Detached-Home Listings Percentage Over $2M Percentage Under $800,000

The noteworthy:

There Are Fewer Homes For Sale – In particular, there are fewer high-quality homes for sale that would make it worth it for existing homeowners to move up or down.  In spite of having loads of equity, trying to find a home better than your current home is a major obstacle.

Home Prices Are Higher Than Ever – If you can find a house that suits your needs, the price will be higher than ever.  You have to pay more, qualify for more, and be willing to eat higher recurring costs like property taxes too.

Cost of Moving is High – Gone are the days when you could throw everything you own into a U-haul and move in a day.  Commissions, closing costs, packers & movers, home upgrades, and new furniture will cost you $50,000 to $100,000 or more in any house you buy around the NSDCC.

Competition is Stiff – As a result of the three items above, buyers are very picky and holding out for the highest quality.  Staying on the edge of your seat 24 hours a day can take its toil!

It’s a Market For The Affluent – With only 5% of the NSDCC houses priced under $800,000, it means home buying is only for those who have real horsepower – and regular folks are priced out, unfortunately.

The stakes are high, and making any mistakes now will be very costly.  The worst part is that home prices are moderating (except in Solana Beach), and without an increase in their equity position, those who need to sell shortly after purchasing could incur a substantial hit.

We are in the No-Mistake zone. Get good help!

P.S. The Solana Beach house on Rios that set the all-time non-oceanfront price record in March at $8,250,000 was relisted for $9,750,000…..and it went pending today!

Segovia Shoot-Out

The Battle of Segovia is over.

Two of the same models were for sale across the street from each other in La Costa.

I had listed the green house on May 30th for $859,000, but because the seller claimed to be intensely private, he didn’t want it on the MLS, no signs, and no open houses.

I was curious to see if it is possible to sell an older house for a premium price just off internet ads – but we didn’t have one showing, so we agreed to part ways after five weeks.

Before we did, I suggested that we lower the price to $829,000.

The seller said, “I can sell it myself for that – I don’t need you”.


At the end of July, I listed the house across the street at 3022 Segovia Way for $888,000.  It was featured here a few times – it was the original-looking house with the 13,000sf lot that backed to the school/park:

Twelve days later an agent from the auction company puts the green house on the MLS, priced on the range $839,000-$859,000.

When I was dealing with that seller, he was unwavering about price, so no surprise to see them adopt a similar pricing strategy – especially with me across the street at $888,000.

But it caused a standoff.

Buyers liked my big yard but were cautious about backing to a school yard and the amount of work needed to bring the home into this century.  The competitor across the street was cheaper and move-in ready….if you liked his DIY improvements.

The inevitable price war began:

August 12th: She listed on the range $839,000-$859,000.

August 19th: We lowered to $859,000.

August 23rd: She changed to $830,000 (no range).

August 27th: We lowered to $839,000.

We were doing open houses at the same time and were friendly competitors who compared notes. The action was good, and I thought we were probably close to selling both.

But her listing was running out at the end of August.

So when she re-listed with the seller, they decided to adopt the auction format instead.  She re-inputted the home as a new listing, priced at $699,000!

Their format provides some uncertainty because the seller has an undisclosed minimum price and they can sell the house before the auction.  Up until now, everyone knew that the seller had been expecting $800,000+, so buyers figured that they weren’t going to be able to buy it for the $699,000 or close – and they’d have to wait a month until the auction before finding for sure.

We didn’t change our price or strategy, and two weeks later – after buyers had a chance to re-calibrate – we had three offers and sold for $835,000.

The house across the street sold for $750,000.

For best results, list your home with Jim the Realtor!

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