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Big city Californians flee to lower-tax locales or next door

Three of the country’s top four metropolitan areas where people are moving away from are in California, but the top inbound destination also is in California.

Property data company CoreLogic released its inaugural ranking of metropolitan areas for incoming and outgoing movers in 2020. Using its proprietary data based on the number of loan applications, it found the San Francisco, Los Angeles and San Jose markets had the most families selling their homes and not relocating within the same area. 

New York took the Aug. 4 report’s top spot for outgoing residents, but the city’s large population appears to be the reason for the large number. Of the total New York loan applications measured by CoreLogic in 2020, only 19% were outbound. By comparison, 45% of San Jose’s applications were for homes outside of the area.

The report’s authors spoke with several local real estate agents nationwide about what they saw in 2020, with many finding still-employed families able to afford more home with better amenities after the COVID-19 pandemic untethered them from their offices in downtown areas.

“Buyers are moving from both coasts, primarily from California and New York, to Texas,” Bill Clarkson, a real estate agent with Century 21 Judge Fite Company in Dallas, told CoreLogic. “They’re like kids in a candy shop, typically cash buyers, and quickly learn that the square footage and lot size is beyond their expectations compared to what they are used to seeing in their home states.”

CoreLogic suspects the mass shift to remote work, low mortgage interest rates, slow new home construction and a “growing public awareness of the risk of crowded places, all contributed to a much more pronounced shift away from large cities to more affordable, sunny climates.”

Many Californians, however, decided not to leave the state entirely, opting to sell their urban home for one in the Inland Empire.

The report listed the Riverside-San Bernadino-Ontario area as the top market in the country for inbound moves. The market has a history of being an affordable alternative to the high cost of living in the Los Angeles market. 

“The average home price in the metro area with the highest level of in-migration, Riverside-San Bernardino-Ontario, California, was $436,288 in 2020,” the report said. “That contrasts with an average home price of $989,157 in Los Angeles and $812,401 in San Diego, two nearby metro areas that were among those with the highest out-migration in 2020.” 

This data aligns with address change information from the U.S. Postal Service that showed 72% of those who moved from San Francisco only moved to another location in a nearby town that’s further out from the city’s metropolitan center.

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