2020 was a tough year for everybody. But aside from the pandemic, more people are saying goodbye to the California dream. Over the last two years, more people have left the state than those who have arrived in search of fine weather and prosperity. The COVID-19 stay-at-home order alone resulted in a net migration loss of 136,000 people from April to June of 2020.
While we thought the Golden State will always remain golden, it seems that more people are giving up on California. The moniker was coined after a gold rush sparked a large migration of individuals moving west seeking to improve their fortune in 1850. The state saw another growth spurt after World War II, and boomed again in the 1980s and early 1990s as technology firms made Silicon Valley a household word. However, recent years have seen less influx of new residents and more leaving the state.
As it pertains to the real estate industry, there are three main reasons why people are leaving California.
Housing – Housing costs in California are among the highest in the nation. High real estate and rent prices force people to live further away from work, causing long commutes. What you might save in rent, you pay for in gasoline if public transportation is not an option.
High Taxes –It’s stratospheric tax rate of 13.3% makes California one of the highest taxed states in the nation. Many are looking to move to other states that have a lower tax rate – or no state tax at all – such as Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.
Environment – California now has a “wildfire season” causing smoky air three months of the year. Wildfires have caused much damage to many homes in California, resulting in families seeking a safer place to live.
There are still lots of reasons to stay in California. It is definitely one of the most beautiful states in the nation. With year-round sunny weather, many still call California their home.
On a side note, while others may be bidding California goodbye, we've recently made new Royal neighbors! Prince Harry and Meghan Markle moved into their $14.65 M mansion known as "The Chateau" in Santa Barbara last July, making them neighbors with celebrities Oprah Winfrey and Ellen DeGeneres.
Regardless of the number of people moving out of state, we are still experiencing a seller’s market, with more people looking for homes than there are listings available. As a result, housing prices are up considerably. If you are looking for options, talking with a real estate professional can steer you in the right direction.