California residents step up search for more affordable homes outside the state, study finds
California residents are ramping up their search for more affordable housing in other states, according to a recent study from real estate website Redfin.
Golden State dwellers are increasingly exploring more affordable options in cities like Las Vegas, Phoenix, Tampa and Orlando, according to a new Redfin analysis. The site said a record high 25.5% of Redfin users from April to June searched for homes in a new metro area, and said San Francisco and Los Angeles ranked first and third, respectively, for cities with the most number of users looking for an out-of-state home.
"The typical Las Vegas home costs less than half as much as one in Los Angeles, San Francisco or Seattle, the most common origins for buyers moving in," the study noted. "Phoenix and Tampa are the next most popular destinations. Along with Las Vegas, they’re increasingly prone to natural disasters like heat and flooding, but relatively affordable."
The median home in Las Vegas costs $412,000, less than half of the $975,000 median price in Los Angeles and less than a third of San Francisco's $1,405,500 median home price, the study found. It's the first time Las Vegas topped Redfin's list for most popular homebuyer destinations.
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The U-Haul Growth Index, which analyzed over two million one-way trips in the past year, placed California at the bottom of the list due to a surge in demand for rental trucks leaving the state. (iStock)
Researchers found that the most common origins of Redfin users who are searching to relocate to Las Vegas are San Diego, Los Angeles, San Francisco, Seattle and Chicago. San Francisco, New York and Los Angeles are experiencing the highest net outflow of homebuyers among all major metros in the U.S., and the top out-of-state destination for LA residents is Las Vegas.
"Nearly all of the most popular destinations have cheaper homes than the places out-of-towners come from," the study noted.
The trend is reflected in other pricey job hubs like Washington, D.C., and Boston, where housing costs are pushing homebuyers to seek more affordable areas, Redfin found. The transition to remote work opportunities since 2020 has helped facilitate this shift, allowing people to opt for regions with more budget-friendly housing options.
The Redfin study was based on two million Redfin users who viewed homes for sale in 100 metro areas between April and June. Redfin considers people to be a "migrant" if they look for at least 10 homes for sale and at least one of those homes was outside their metro area.
The more users search for cities outside their current metro area, the more Redfin counts them as a "migrant."
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San Francisco has the highest median home value of $1,405,500 in the nation. (DeAgostini/Getty Images)
Another online real estate website, MyEListing.com, found that California lost more than $340 million in 2021 IRS tax revenue due to outbound migration.
"Despite its numerous attractions, from the booming tech industry and world-class universities to beautiful landscapes and cultural richness, California's high personal income tax rates seem discouraging for many high-wealth individuals," MyEListing wrote in its analysis. "This, coupled with the state's high cost of living, will likely fuel a wealth migration out of California."
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Las Vegas topped Redfin's list for most popular homebuyer destinations for the first time, company says. (Gabe Ginsberg/SOPA Images/LightRocket via Getty Images)
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Between January 2020 and July 2022, the state saw an exodus of over 500,000 residents, significantly outnumbering those moving into the state by nearly 700,000. Highlighting this trend, the U-Haul Growth Index, which analyzed over two million one-way trips in the past year, placed California at the bottom of the list due to a surge in demand for rental trucks leaving the state.
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