Take this home market...and love it
High housing prices are driving residents from many U.S. metro areas. Here's where they are going.
December 12, 2005: 12:39 PM EST
By Les Christie, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) - Home prices in many American metro areas have soared, and many of their residents are either pulling up stakes and moving to lower priced regions -- many more are thinking about it.
Sometimes, these migrants are simply desperate to break into the housing market -- they're moving so they can stop renting and buy an affordable home of their own.
For those who own already, high-prices enable them to tap windfall profits -- they can trade in expensive houses for comparable spaces at a much lower prices and pocket the difference.
In either case, "Affordability is a factor driving mobility," says Mark Zandi, chief economist for Economy.com.
The trend is most pronounced in California, New York City and environs, the Boston metro area and northern Virginia (see table below).
Artistic license
Take New York City. It's not just New Yorkers retiring and moving to Florida, anymore, or buying a tract home in the suburbs.
One example: For decades the city's vibrant art scene was made possible by the presence of low-priced space that starving artists could afford to live and work in. In Bohemian days, it was Greenwich Village. In the 1960s, artists moved into the East Village, Soho and Tribeca. Later on artists found cheap loft spaces in Williamsburg and Long Island City.
All those locales are now out of the price ranges of most artists just starting out.
The result: "Philadelphia is the new Williamsburg" has become the hot, hip saying around artistic circles.
The numbers bear it out: in 2004 there was a net outflow of 11,490 people -- of course they weren't all artists -- from New York to Philadelphia, according to data provided by Economy.com. That is, 11,490 more people moved from New York to Philadelphia than vice versa, an astounding number for one year.
California scheming
California movements have been even more spectacular. The incredible gains made in home prices in California have also resulted in mass exoduses from the main coastal cities to other California towns and to Las Vegas and Phoenix, where houses are much more affordable (although gaining fast).
Nearly 70,000 residents of the Los Angeles area moved inland to the Riverside/San Bernardino area in 2004. That was added to by a net outflow from San Diego to Riverside of 16,751.
The difference in the price of the median LA home ($553,200) and Riverside ($387,300) helps explain the direction of the flow. And the flow is accelerating. In 1999, the net difference was only about 33,000.
The migration has bolstered Riverside prices. They've more than doubled in the past three years. And, in turn, Riverside residents are starting to take their leave for places like Phoenix, where 1,499 more Riverside residents moved to than from in 2004 and where, despite the hottest housing market in the country, a median priced house still sells for just $268,000.
Californian's are even looking further afield: There is anecdotal information that Californians have left for inexpensive areas in Missouri, Kansas, Iowa, and other Midwestern states.
Where people are leaving...where they're going (see link)
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