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Charting the California Exodus

My guess was that we’d have 10% MORE listings this year, as a result of there being a few more reasons to move – covid letting up, Prop 19, forbearance expiration, etc. Instead, we have covid hanging around, Prop 19 has been a dud, and forbearances have been extended through the year.

With 19% FEWER listings (so far), the impact shifts to pricing, and we see rapidly-rising home prices instead.  We need more people leaving, and fewer people coming, to balance it out – and price will fix that too!

Hat tip to CP for sending this in this report from CPL:

Recent news reports, preliminary data, and anecdotes suggest the COVID-19 pandemic is either causing or accelerating an exodus from California. The extent of any such exodus, and whether it proves to be temporary or permanent, is not yet clear — at least not in data sources traditionally used to quantify residential mobility.

The stakes are high: significant population shifts could affect the size and composition of regional labor markets as well as rent and home values. Some fear that mass departures by the state’s wealthy could reduce local and state tax revenues, potentially affecting the services governments are able to provide for years to come.

This policy brief uses the University of California Consumer Credit Panel (UC-CCP), a new dataset containing residential locations for all Californians with credit history, to track domestic residential moves at a quarterly frequency through the end of 2020.

 

For the full report of every county in California, click here:

https://www.capolicylab.org/calexodus-are-people-leaving-california/

A move is defined as having a different ZIP code in the next quarter. The data universe for this analysis is individuals in the UC-CCP with credit history; this population is older, more financially advantaged, and less diverse than the population of all adults in California.who had a different zip code on their credit report.

Nomadland

Selling the house and hitting the road sounds like an adventure.  For some, it might be the only choice – and I think their numbers are probably increasing.

I haven’t seen this movie yet, but it looks like a good depiction of home on the road:

P.S. My Dad worked at USG for most of his life.

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Retire to Florida?

Hat tip to DB for sending in this article/trailer:

New documentary, ‘Some Kind of Heaven’ explores the dark underside of America’s largest retirement community known as ‘The Villages’ in central Florida with a notorious swingers scene.  The community was designed to be a manicured fantasy land for seniors aged 55+ ; grandchildren and visitors under the age minimum are strictly prohibited to visit for more than 30 calendar days.

  • It’s dubbed ‘the Disneyland for retirees’ because the neighborhoods are designed like a theme park to imitate old town squares, complete with make-believe histories; residents say its like living in a ‘bubble’
  • The developers own a TV channel, multiple radio stations and newspaper that only prints positive news
  • Critics say The Villages are like a creepy Stepford cult for Baby Boomers with Orwellian-like rules that are dictated by an elusive family worth billions of dollars
  • According to the US Census, The Villages is the fastest growing metro in the United States where the population rose by 37.8% between 2010-2019;  homes cost between $100K to $1million
  • The Villages is larger than the size of Manhattan and covers 32 square miles of property with 130,000 residents, five zip codes, 50 golf courses, 100 rec centers, 11 dog parks, 14 supermarkets
  • There are 2,700 social and recreational clubs for residents that include one for: singles, Beatlemaniacs, synchronized swimming, softball, cheerleading and retired CIA members
  • The Villages were ‘designed to hide all of the problems of everyday life’ says first time documentarian, Lance Oppenheim – his film follows the lives of four seniors that live on the fringe of the fantasy

https://www.dailymail.co.uk/news/article-9147745/Inside-Utopian-Disneyland-retirees-belies-sinister-underbelly-racism-orgies.html

Migrating….Close to Home

Hat tip to just some guy for sending this news which shows that while migration has increased, many are opting to stay closer to home:

San Francisco’s chief economist, Ted Egan, said that while the out-migration patterns are alarming — only Manhattan has had as large an increase in people leaving the city during the pandemic — the fact that many are not going very far could represent “a silver lining” as the economy recovers post-pandemic.

“You are not going to have to worry about getting them to move back from Boise,” he said. “It looks more like normal pre-COVID migration flows. People are settling into nearby Bay Area suburbs. They are going to Sacramento and L.A. Travis County, which is Austin, Texas, is way down the list. Portland is way down the list. New York is way down the list.”

Maybe it means that our 55+ crowd may grab their old property-tax basis and just move a little further out after April 1st?  We only need a few hundred of them to do so!

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The National Housing Squeeze

Good article from the wsj:

Statistically speaking, Idaho is one of America’s greatest economic success stories. The state has low unemployment and high income growth. It has expanded education spending while managing to shore up budget reserves. Brad Little, the state’s Republican governor, has attributed this run of prosperity to the mix of low taxes and minimal regulation that conservatives call “the business climate.”

But there is another factor at play: Californians, fleeing high home prices, are moving to Idaho in droves. For the past several years, Idaho has been one of the fastest-growing states, with the largest share of new residents coming from California. This fact can be illustrated with census data, moving vans — or resentment.

Home prices rose 20 percent in 2020, according to Zillow, and in Boise, “Go Back to California” graffiti has been sprayed along the highways. The last election cycle was a referendum on growth and housing, and included a fringe mayoral candidate who campaigned on a promise to keep Californians out. The dichotomy between growth and its discontents has fused the city’s politics and collective consciousness with a question that city leaders around the country were asking even before the pandemic and remote work trends accelerated relocation: Is it possible to import California’s growth without also importing its housing problems?

“I can’t point to a city that has done it right,” said Lauren McLean, Boise’s Democratic mayor.

That’s because as bad as California’s affordable housing problem is, it isn’t really a California problem. It is a national one. From rising homelessness to anti-development sentiment to frustration among middle-class workers who’ve been locked out of the housing market, the same set of housing issues has bubbled up in cities across the country. They’ve already visited BoiseNashvilleDenver and Austin, Texas, and many other high-growth cities. And they will become even more widespread as remote workers move around.

Housing costs are relative, of course, so anyone leaving Los Angeles or San Francisco will find almost any other city to have a bountiful selection of homes that seem unbelievably large and cheap. But for those tethered to the local economy, the influx of wealthier outsiders pushes housing costs further out of reach.

Link to Full Article

Move to Mexico?

Are you thinking about moving, but after living in San Diego, you wonder about places like Austin where the high temperature today is predicted to be 28 degrees? How about Mexico? Here are some tips:

In 2006, after years of living paycheck to paycheck in Santa Cruz, California, I decided to move to Mexico. I was 50, and a prior vacation in the beautiful coastal town of Mazatlán had convinced me that an easier, happier and affordable lifestyle was possible.

Right now, it seems like many people are fantasizing or seriously thinking about moving out of the U.S., but are unsure of where to start. I thought I was well-prepared, but it was still a bumpy ride for a couple of years until I really felt settled. Today, I’m retired and living on just $1,000 per month.

Here are some tips I wish I’d known in the beginning:

1. Visit more than once, in different seasons

Once you’ve decided on a place, make an exploratory trip — and stay as long as you’re able to. I took a one-month leave of absence from my job and rented a furnished apartment in Mazatlán to see what it was like to live in a neighborhood instead of a hotel in the tourist zone.

Why different seasons?

Because that beautiful beach town may become unbelievably hot and humid during the summer months; those cool mountain breezes might warrant space heaters and wool sweaters in January.

Listen to, but don’t rely completely on, what other people say, no matter how reputable they seem. Only your experience can tell you exactly how you’ll feel.

Read full article here:

Link to Article

Is California Exodus Overblown?

Long-time homeowners who can keep their taxable income lower and pay off their house don’t find California that much more expensive (based on how few are moving). Excerpted from this article:

https://finance.yahoo.com/news/why-rich-people-leaving-california-isnt-what-you-think-130327533.html

In short, California and San Francisco in particular, has always been off-kilter and difficult, but at the same time remarkable and inspiring. (Maybe what’s different now is just that there’s more money.)

There’s a camp that downplays this recent exodus, arguing for one thing, that there are no hard numbers to measure the scale or import of people leaving.

“I feel like it’s too early to know, and anybody who claims they know for sure is doing that based purely on anecdote,” says Molly Turner, a professor at UC Berkeley’s Haas School of Business focused on tech and urban policy, who co-hosts the podcast “Technopolis.” “My gut tells me it’s mostly just a couple of loud people leaving and throwing a tantrum on the way out. I don’t think it will have a significant impact on the Bay Area as the global center of the tech industry.”

OK, that’s the gut, but what does a moving guy say? “Typically in years past [moving jobs have] been about 50% outbound, 50% inbound,” says Steve Komorouswho since 1988 has co-owned King Relocation Services, a moving agency in Los Angeles, California. “In 2020, it was 59% outbound, 41% inbound.”

Is that imbalance the biggest Komorous has ever seen? “I think that’s going too far,” he says. “I’ve been in this business since 1982. There have been big, funky years. This cycle of the mad dash leaving California, that will subside. It may take another year or so. It’s just a cycle.”

(more…)

Top Markets in 2021

Zillow Survey Predicts Austin will be the Nation’s Hottest Housing Market, Leading a Sunbelt Surge
More affordable metros are replacing expensive coastal areas as top drivers of home value growth
— A panel of economists and real estate experts expect Austin to outperform the national market by the largest margin, followed by Phoenix, Nashville, Tampa and Denver
— Expensive coastal markets New York, San Francisco and Los Angeles are most likely to underperform, though Zillow expects growth in every market
— Key tailwinds include an improved economic outlook underpinned by progress on coronavirus vaccines, while affordability and available supply are potential drags

SEATTLE, Jan. 19, 2021 /PRNewswire/ — Austin will be America’s hottest housing market in 2021, leading a list of mostly Sun Belt cities expected to continue heating up faster than the nation’s large coastal markets, according to a new Zillow® survey of experts.

The booming Texas destination heads a lineup of sunny and relatively affordable metro areas — PhoenixNashvilleTampa and Denver — that are most likely to outperform the nation in home value growth, according to a panel of economists and real estate experts recently surveyed by Zillow.

The Zillow Home Price Expectations Survey, sponsored by Zillow and conducted quarterly by Pulsenomics LLC, asks a large panel of economists, investment strategists and real estate experts for their predictions about the U.S. housing market. The Q4 survey also asked about their expectations for 2021 home value growth in 20 large markets compared to the nation.

An overwhelming 84% of those surveyed said Austin values would out-perform the national average, compared to just 9% who believe it would fare worse. Phoenix came in second with 69%, followed by Nashville (67%), Tampa (60%), and Denver (56%). Page views on Zillow for-sale listings in Austin by out-of-town searchers were up 87% in November compared to 2019. 

The top-five metros are all affordable options compared to expensive coastal areas that have led home appreciation ranks in recent years, providing relative value for Millennials looking to take advantage of low mortgage rates to buy their first home. The top five are also, for the most part, sunny locales. Four of the five counties holding the largest cities in these MSAs all rank in the top-third of counties in the contiguous U.S. for average daily sunlight, according to NASA data analysed in The Washington Post. Davidson County, home to Nashville, ranked just below the midline.

“The pandemic has not upended the housing market so much as accelerated trends we saw coming into 2020,” said Zillow senior economist Jeff Tucker. “These Sun Belt destinations are migration magnets thanks to relatively affordable, family-sized homes, booming economies and sunny weather. Record-low mortgage rates and the increased demand for living space, coupled with a surge of Millennials buying their first homes, will keep the pressure on home prices there for the foreseeable future.”

An improved economic outlook thanks to COVID-19 vaccine roll-outs and better treatments was pegged as the most likely tailwind for the housing market in 2021, followed by sustained strength in first-time home buying among Millennials. It proved a powerful demand driver in 2020 and is expected to persist for years to come.

Link to Zillow Article

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