Outmigration in Metro Areas of California

By Jonathan Haeber
CMR Columnist

In the 1930s, dust bowl migrants flocked to California in search of a new life. California experienced its greatest population increase since the Gold Rush. Today, the Golden State of opportunity is now experiencing rapid outmigration in major cities. Why? And how will this affect California home loans and mortgages?

The biggest influence on outmigration has become price and cost-of-living increases. San Francisco has one of the highest median home prices for a metro area ($718,000); Los Angeles follows closely behind ($568,000).

Cashing Out and Moving On

"Some people are cashing out and moving to cheaper areas," says Marc Perry, U.S. Census demographer, "others, who don't own homes, are moving so they afford to buy one." The key reason is affordability. But where is everyone going? According to statistics from the Census Bureau, they're going back to the Sunbelt--that same place many people left during the Great Depression.

Even though New York tops the list of people who leave, California is the only state with two metro areas on the list of the top five. Per household, San Francisco lost the most people from 2000 to 2004. For every 1,000 households in San Francisco, there were 14.4 people who left.

Don't Panic! Price Appreciation Will Likely Remain Stable

There's no need to panic if you own a home in these areas. Price appreciation will likely remain stable--that's because California also has some of the largest gains in migration. Even though prices are likely inflated in many areas of California, there are still a number of bargains to be found.

Affording a home mortgage in California is still within reach. You just need to know where to look. For example, in the case of Los Angeles, many residents there simply moved an hour away to the "Inland Empire." Also known as Riverside-San Bernardino, the "Inland Empire" had the biggest net gain in population, precisely because the median price of a home there is about $175,000 lower than nearby Los Angeles.

Sources
Outmigration from the Cities: CNN Money

About the Author
Jonathan Haeber is a marketing writer for Discovery Channel Stores. He recently purchased his first home, and took a self-taught crash course in home mortgages.

© 2006 CMR. All rights reserved.