Covid-19 Has Changed How Californians Live & Work
As the Covid-19 pandemic continues in California we want to take a deep dive into how its effected where Californians live.
Since the start of the pandemic, it’s been reported that Californians abandoning their usual way of life for greener (and cheaper) pastures. There are the San Franciscans who weathered lockdown orders in Lake Tahoe, and the Los Angelenos with new desert cabins in Joshua Tree. Tales abound of Silicon Valley types moving home to Miami and Seattle; or renting acres of land in Idaho.
1. How The Real California Story Goes
The story goes like this: The coronavirus and the ability to work remotely have fundamentally reshaped where we want to live — and large California cities, particularly Los Angeles and San Francisco, are not on the list. But is any of that true? Let’s start with the short answer. There hasn’t been an exodus from California, but pandemic forces have shifted where people reside within the state. Those patterns of relocation mirror what we were already seeing before Covid-19, but on overdrive.
California’s population dropped slightly in 2020 but nowhere near what the media pushes of a mass migration to other states. The drop was just 0.46% according to Cal Matters. The main drivers being coronavirus deaths, a lower birthrate and fewer international arrivals.
In fact, 82 percent of Californians who moved last year stayed in the state, according to a report from the California Policy Lab. That figure has been basically stable over the past five years.
State forecasters stress that the factors that contributed to this population dip are unique to this period — and therefore temporary. In 2020 roughly 51,000 Californians died of COVID-19. Travel restrictions and fear of contagion also dramatically tamped down the number of new arrivals from abroad, the main source of the state’s population growth over the last decade.
2. What To Expect In The Future For Californians?
Californians who moved last year stayed in the state 82% of the time, according to a report from the California Policy Lab. That figure has been basically stable over the past five years.
“A lot more people are moving around within the state than they are out of the state,” Eric McGhee, a senior fellow with the Public Policy Institute of California. “That movement tends to be within a certain metropolitan area, and a lot of that is people moving to suburbs and exurbs.”
Californians are likely to move from Los Angeles to the Inland Empire or from San Francisco to the fringes of the Bay Area or the Sacramento region, McGhee said. That’s because they want cheaper housing but don’t want to end up so far away that they need to change jobs. These were the largest county-to-county net migrations in California between 2015 and 2019, according to census data:
- Los Angeles to San Bernardino (20,809 people)
- Los Angeles to Riverside (13,949)
- Los Angeles to Orange (11,879)
- Alameda to Contra Costa (9,246)
- Orange to Riverside (8,282)
- Los Angeles to Kern (6,032)
- San Diego to Riverside (5,892)
- San Francisco to Alameda (5,469)
- San Francisco to San Mateo (4,239)
The Inland Empire tied Phoenix in 2020 for the biggest gain in households from migration nationwide. The flow of humanity into Riverside and San Bernardino Counties increased by 50 percent compared with the previous year. This reflects Californians’ desire to escape the exorbitant home prices of more coastal regions. In Riverside County, the median single-family home price in August was $570,000, compared with $830,070 in Los Angeles County and $1.85 million in San Francisco.
The overall numbers of Californians coming and going mask much larger changes within the state. The more dramatic “exodus” has not been from California to Florida, but from the Bay Area to the Central Valley and from Los Angeles to the Inland Empire. As financers of Trust Deeds throughout California we keep a close eye on growth trends. While it may seem prudent to push up loan-to-value ranges in growing areas, we still remember 2008 & 2009. We will working our winning formula that maximizes capital preservation while returning above average returns. There’s a reason why long-term California real estate investors consider Coastal Capital their financing partner of choice.