Since 2012, median list prices in California have increased 77 percent reaching $530,000 in April, and outpacing the local income growth, which increased only 25 percent, thrice over according to a recent analysis by Realtor.com that looked at the effects of the record high home prices in 16 California markets that was driving housing demand out of those regions.
The report found that inventory accessibility was twice as much constricted in these markets compared to the national average and the rest of the Golden State with the typical household only being able to access 18 percent of available inventory against a national average of 39 percent.
All these factors together have led to an increase in outward migration of homebuyers and a rapid decline of inward migration in these regions since 2016, the report found. The 16 counties include Santa Clara, San Mateo, Los Angeles, Napa, Monterey, Alameda, Marin, Orange County, Santa Barbara, San Diego, Imperial, Ventura, San Francisco, Santa Cruz, Tulare, and Sonoma.
Citing the latest ACS Census migration estimates, the report revealed that the 16 California counties saw domestic migration fall by more than 500 residents in 2017 and within those counties, “domestic migration decreased by a total of 678,000 residents since 2010, losing an average of 97,000 residents to other counties each year,” the report said. “In 2017, that annual rate of decline virtually doubled, and the counties combined lost 189,000 residents to domestic migration in just one year.”
Of the 16 counties, Santa Clara, San Mateo, and Los Angeles saw the sharpest drop in domestic migration with ratios ranging from 0.9 percent to 1.36 percent the report indicated.
Yet, these markets remain among the hottest in the country with eight of the hottest 50 counties in the U.S. featuring in California. On a closer analysis though, “sustained pressures to prices, coupled with non-corresponding increments to local wages, are finally stress-testing demand past the boiling point,” the report said. “It’s not until recently that we’ve detected enough signs of buyer frustration in online search activity that are consistent with recent drops in net migration.”
The report revealed that despite listing views for homes in these counties being 1.5 times higher this spring, the home purchases have stalled. Realtor.com found that the average listing views in these counties were flat and demand too was down from a year ago.