Some residents leaving coastal California as housing costs rise
LOS ANGELES — Chris Birtwistle and Allison Naitmazi were about to get married and decided it was time to buy a home.
They wanted to stay close to the Orange County community of Huntington Beach where they’d been living but couldn’t find a house they both liked and could reasonably afford — despite a dual income of around $150,000.
So they decided to go inland — all the way to Arizona, where they recently opened escrow on a $240,000, four-bedroom house with a pool just outside Phoenix. Their monthly mortgage payment will be about $500 less than what they paid for a two-bedroom apartment in the Orange County beach community.
“The only hesitation was (leaving) the great weather,” the 31-year old Birtwistle said. “But we talked about what we can get here and what we can get there for the same price and that was a no-brainer.”
Residents of coastal Southern California are increasingly making the same decision to move away — a trend many economists blame on a housing shortage driving rents and home prices sharply higher during the economic recovery.
Moves out of the area remain far below levels seen during last decade’s housing bubble, when out-migration was nearly triple what it was in 2016 — and real estate agents urged clients to “drive until you qualify.”
But after slowing down in the aftermath of the Great Recession, which devastated the housing market, out-migration is picking up as prices climb steadily higher, according to U.S. Census Bureau data.
To escape high prices, people — often younger and with lower- or middle-class incomes — are looking toward the east-of-Los-Angeles region known as the Inland Empire and nearby states for additional square footage and a lower mortgage payment.
“(Migration) is settling back into longer-term patterns,” said Jed Kolko, chief economist with employment website Indeed.com who analyzed the data. Others were more blunt. “The impact is to create an auction situation between the haves and the have-nots,” Christopher Thornberg, founding partner of Beacon Economics, said of the housing shortage. “And the havenots have to move away.”
In 2016, about 75,000 more people left Los Angeles County than moved here from other places in the United States, the data show. That rate of “negative domestic migration” is 21 percent more than a year earlier, and nearly double the level seen in 2012 when moves away from the county had bottomed out.
A similar trend exists in Orange County, where the median price of $645,000 is higher than the peak last decade, a level not yet hit in LA County.
Detailed data on who moved and where is not available yet for 2016, but it is for previous years.
In 2015, the top destination for those leaving LA County was the Inland Empire, followed by Nevada, Arizona and Kern County, the home of Bakersfield. In Orange County, most left for the Inland Empire, Idaho, San Diego County and Arizona.
Younger people and those with low and moderate incomes moved out at the greatest rate, though negative domestic migration was seen among people of all generations and income brackets, including households with incomes of $100,000 to $200,000.
“People still want to be here,” said Jordan Levine, an economist with the California Association of Realtors, who compiled the age and income data. “It’s just a question if you can afford to be here. Higher-income people and those with more education have a better shot, but even they are struggling.”
That includes people such as former Huntington Beach residents Birtwistle and Naitmazi, who are purchasing a nearly 2,260-square-foot home in Avondale, Ariz. The mortgage comes with monthly payment of only $1,300.
Similar-sized homes in Huntington Beach are going for a minimum of $800,000, and Birtwistle said their options in Orange County were limited because they wanted to stay in a neighborhood with good schools and low crime rates.
In Arizona, Birtwistle said his fiancee was able to keep her marketing job, while he secured a new one as a manager for a used car retailer.
“Really, the desire to move outside of California was to do with wanting to have more financial stability,” he said.
The population in Los Angeles and Orange counties is still growing, a result of births and immigration from other countries. Jobs are on the rise too.
But as people such as Birtwistle leave, some businesses and economists are becoming concerned.
“How do we grow our economy when we can’t recruit the workers who can come here and have a decent quality of life?” Levine said.
Rob Lapsley, president of the California Business Roundtable, a senior executives group, said housing has “quickly risen to the top of issues impacting decisions in the boardroom.”
Businesses are struggling to recruit and some are putting off expansions, Lapsley said, while others are moving mid-level office jobs to neighboring states.