Sac among top COVID-19 relocation destinations
SACRAMENTO — If there is a COVID-19 sweepstakes winner among large urban areas in the country, in may well be Sacramento, a new analysis shows.
Sacramento led St. Louis, Detroit, Baltimore and Southern California’s San Bernardino and Riverside area as the metropolitan areas that saw the biggest migration turnarounds per capital in 2020.
The analysis of the 30 largest metro areas was conducted by CBRE, a national commercial real estate service, and is based on U.S. Post Office change of address data. It represents the most definitive data review yet of what has been, for at least a year, a seismic shift in where people choose to live in the U.S.
Mid-sized areas that are less dense and expensive, but offer real urban experiences as well as suburban and rural lifestyles, became more popular in 2020.
Sacramento saw the biggest migration turnaround per capita in 2020. It went from losing 35 people net per 10,000 population to other cities in 2019 to gaining 3 per 10,000.
That made it one of only two major California metro areas drawing more people from other U.S. areas than it lost. The other Golden State metro area with that growth was the Inland Empire, mainly made up of Riverside and San Bernardino counties, each of which attracted people moving out of Los Angeles.
Sacramento also ranked sixth nationally in highest per capital move-ins, trailing Austin, Texas, Charlotte, the Inland Empire, Phoenix and Dallas.
In the time of coronavirus, “we have a welcoming region,” said James Corless, the region’s lead planner at the Sacramento Area Council of Governments. “We have a fantastic quality of life and culture.”
Sacramento was one of only nine of the country’s 30 largest metropolitan areas to show net gains of domestic migration. Overall, it appears, more people nationally who moved in 2020 found new homes in smaller suburban and rural areas.
The postal service data could help the region’s policymakers figure out what impact those new residents are having — for better and worse — on Sacramento’s economy, real estate values, transportation, commute and growth patterns, as well as infrastructure needs and overall livability.
Two obvious issues pop up immediately, Corless said.
The region will have to strengthen its train service from Auburn through Sacramento and into the Bay Area to avoid having commuters clog the freeways between the valley and the Bay.
And, Corless said, Sacramento has to find a way to manage its escalating home prices. Otherwise, “we lose the very edge we have. We want our existing families to be able to afford to stay here. We need a housing strategy.”
The new data supplements an earlier, more narrow analysis from LinkedIn, showing that the Sacramento region was the third most popular destination in the country for professional workers who left the Bay Area in 2020. Sacramento ranked behind tech meccas Seattle and Austin, and ahead of Portland, Ore., and Denver.
Sacramento, like many California cities, was losing residents to other areas in 2019, mainly to less expensive western cities. But when COVID-19 hit in 2020, that changed notably.
Some Sacramento-area residents still moved to less expensive areas in 2020, but those losses were more than compensated for by an influx to Sacramento, mainly from the Bay Area.
According to the report authors, as well as economists, real estate analysts, and business leaders, the dynamic was simple:
COVID-19 prompted many Bay Area companies to allow their office workers to work from home. In response, a slice of those people chose to move to Sacramento and other areas where real estate prices and apartment rentals were less expensive.
“To a degree, people are moving to lifestyles they prefer or areas that are more affordable while remaining in the broader orbit of the economic megaregion,” said Eric Willett, CBRE’s Director of Research and Thought Leadership in the southwest United States.
It is unclear how durable that trend will be. With the COVID-19 pandemic apparently on the wane, more companies are expected this summer or fall to rethink their work from home policies and ask more employees to come back to offices, at least part-time.
That could prompt some people now renting in Sacramento to move back to the Bay Area. Others will continue to telework, or may try to commute a few days a week or month into the Bay Area.
CBRE’s research director Willett said he sees this trend going in two directions.
“There will be a reasonably large bounce back” of people moving back to larger urban areas, he said. But the trend of some people leaving places like San Francisco and coming to more affordable places like Sacramento was ongoing before COVID-19 and will continue, especially among people in their late 20s to late 30s.
“Aging millennials are interested in a different lifestyle,” Willett said. In that sense, COVID-19 “has just accelerated a longterm trend.”