Two California cities among top three metros residents are leaving

August 9, 2023


San Francisco has the largest net outflow of residents among cities nationwide, while Los Angeles places third in the rankings of cities residents are leaving, according to a study of home buying trends. 

Real estate brokerage Redfin released a study ranking the top metropolitan areas in the United States from which and to which home buyers are moving. In the second quarter of 2023, San Francisco had a net outflow of 28,1000 residents. 

New York City had the second largest net outflow, 24,200 resident. Los Angeles came in third with a net outflow of 20,900 residents, followed by Washington, D.C. with 15,700 and Chicago with 4,900.

The top destination for home buyers was Las Vegas, a city that had a net inflow of 5,700 residents in the second quarter of 2023. Phoenix placed second with a net info of 5,300, followed by a pair of Florida cities, Tampa and Orlando, with respective net inflows of 5,000 and 4,900 residents. 

A California city, Sacramento, placed fifth among cities to which home buyers are moving. Sacramento was the top destination for residents leaving San Francisco. 

The top destination for residents leaving Los Angeles was Las Vegas. More Los Angeles residents are relocating to Las Vegas than residents of any other city nationwide. The typical Las Vegas home costs less than half as much as one in Los Angeles or San Francisco.

Nationwide, home buyers are continuing to search for more affordable areas. A record one-quarter of Redfin users looked to move to a different part of the U.S. during the second quarter, an increase from about 19% prior to the pandemic. Among Redfin users in San Francisco and Los Angeles, 24% and 19% respectively were searching for homes in different areas. 

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And no one can figure out why people are leaving such wonderful progressive places…

California’s Personal Income Tax (PIT) rates are too high relative to other states and to the point where we are losing net revenue through out migration. State spending needs to be put on a diet.

So we want the growth sprawl and water shortages of Las Vegas and Phoenix? Since when is overpopulated better?

The largest cities, with the most expensive real estate prices, have the largest outflow of homebuyers. Shocking.

I’d be curious to see the figures of inflow and outflow per capita. Obviously LA and NYC are going to have large outflows – they’re huge cities – 24k is a fairly small number for a city close to 10 million.

Of course SF doesn’t quite have that excuse. Hopefully this is a wake up call to increase housing supply to check growing prices. And for us in sleepy SLO it should be a warning about the consequences of NIMBYism.

There is little locally we can do to control home prices. Changing financing requirements and interest rates, and “Sunset magazine” type articles create out of town demand that more than offsets our local efforts.

However, high density 40+ DU per acre can be built in an attractive way that will not appeal to the “out of town, suburban single family residence on a individual lot” buyer.

A possible alternative: Norway allows family homes to be “sub” divided into different ownerships, as the kids moveout, empty nester retirees can divide their homes into different units, where a buyer purchases a bath and bedroom with shared kitchen access.

I strongly agree with greater density as well as mixed use zoning by right. Multifamily smaller homes aimed at first time home buyers, retirees, and young professionals will help mitigation outside buyers looking for a third vacation home in wine country. SLO has the bones to become a European or Japanese or frankly just a pre-1950s American feeling metro. Aggressive growth, up and out.

Heard New Zealand is abolishing “single family zoning” for higher density. Higher density is necessary for as transit hubs, 60+ DU/acre. Maybe alternative “ownership” structures such as long term 33 year land leases for small homes in a home’s rear yard, but high down would be necessary for financing structures.

But the problem is … no matter what we do … macro economic events override our efforts, including poverty in my stoically dry term “macro events”. We are possibly facing a “kicking” in macro events.

Whatever, the AirbNb and VRBO use of homes is counter productive mal-capitalism.