Houses were flying off the market during the pandemic. Recently, the housing market has begun cooling off due to factors like rising mortgage rates and home prices, inflation and a faltering economy, Redfin says.
But people who have the opportunity to relocate – and can afford it – are doing so at unprecedented levels.
More companies are also permitting employees to work from home, allowing buyers to consider living in other parts of the county, farther away from expensive job centers, Redfin notes.
Gary Painter, a professor at USC’s Sol Price School of Public Policy, acknowledges that some people are able to leave high-cost areas due to remote work but doesn’t agree that it’s a key driving factor.
“We’re also seeing that, especially within households, it’s often the case that only one partner within a household is able to maybe fully remotely work,” Painter said.
The boundaries between work and home life are blurring with many people working from home, says Sam Ettus, an author and CEO of Park Place Payments. You need to set boundaries and enforce them for the hours you log off, Ettus says.
People Leaving LA Isn’t New
LA ranked second for highest net outflow out of major U.S. metros in the second quarter, meaning more people were looking to leave LA than move in, according to new data from Redfin.
But this phenomenon isn’t new.
Since the early 1990s, more LA residents left the city than those who moved in from other parts of the U.S.
It’s just that immigration from Asia and Latin America were flowing in to replace the people leaving, resulting in a positive population growth, Painter said.
But in extreme cases, he added, such as the times following the recession induced by the Cold War and what people see today, the city experiences a net population loss.
“We’re not replacing that group from immigration, when we had almost always replaced that group from immigration,” Painter said. “We don’t have the same migration flows from Asia and Latin America that we had typically had in the decades prior to 2020.”
Beyond LA, Redfin ranked San Francisco as the city with the highest net outflow. Other places that made the top five are New York, Washington, D.C. and Seattle.
Research in economics has established that those cities provide great benefit for people starting their careers due to the abundant talent, Painter said.
“Ten years later, you do see people leaving Los Angeles to find places that are lower cost where they can use their skills in different places,” he added.
Where Are Angelenos Going?
The surging housing costs in an already expensive area are putting LA homebuyers in a tight position, prompting them to search for a better bang for their buck.
“Someone who would have to stretch beyond their budget in Los Angeles may be able to comfortably afford a home in Phoenix or San Antonio,” said Taylor Marr, Redfin’s deputy chief economist.
LA buyers also commonly look at places in Las Vegas, San Antonio, and Dallas. Painter would add Colorado and Southern Utah to that list.
Redfin curates its second quarter dataset by taking Redfin.com users who have viewed at least 10 homes in a particular major city, and those homes must make up at least 80% of their searches, according to the company’s website.