Photo: Jeremy Levine/Flickr
High home prices may have finally driven a significant number of California homeowners to search outside of the Golden State for more affordable homes.
Outbound home searches in the California are now more than double the national average as skyrocketing home prices have residents looking elsewhere for affordable housing, according to a newly released report by Realtor.com.
Home price growth was so pronounced in San Jose, CA at the start of this year, that its annual price appreciation was greater than the actual median home price in over half of the country’s 100 largest housing markets.
“Affordability is pricing residents out of the California home market and many are searching for more affordable options in other areas,” Danielle Hale, chief economist for Realtor.com, writes in the report.
Over the last six years, the California median home list price has increased 83 percent to $549,000 from $300,000 — outpacing local income growth by three times.
In 16 of California’s hottest housing markets — including San Jose, Los Angeles and San Francisco — many residents are searching for homes either outside of their county or outside of the Golden State entirely.
Some 52 percent of residents looking outside of their current county are looking to move outside of California. On average, those searching out of state are looking at homes that are 43 percent more affordable than their current residence.
Unsurprisingly, residents looking to leave the Golden State aren’t ready to give up the West Coast sunshine and are eyeing areas that are dry and also have an abundance of sunny weather, as well as being relatively close to California.
The top out-of-state destinations for Californians include Phoenix, AZ, Las Vegas, NV and Prescott, AZ — three housing markets that currently offer more bang for buck compared to the Golden State. Home prices in Las Vegas are still 22 percent below pre-housing crisis peaks.
The 48 percent of residents searching in other California counties are looking at homes that are on average 17 percent more affordable than their current residence.
And while the mass exodus may cool California home prices slightly, it could negatively impact home prices in surrounding areas.
“The exodus could help slow price appreciation in California, but also potentially heat up prices and reduce inventory in surrounding markets, like Las Vegas and Prescott,” Hale notes.
For its analysis, Realtor.com looked at search data for 16 of California’s hottest markets on its site as well as migration estimates from American Community Survey. Search data used for the analysis included both outbound traffic and the ratio of search traffic viewing pages outside of an area versus outside traffic coming in.
Click here to read the entire release.