“California has worn me quite thin… I just can’t wait to see you again.”
— from “Come Monday” as performed by Jimmy Buffett
When I was 17, I took a trip to California that included a visit to San Diego, a stop at Disneyland, Knott's Berry Farm and the Hearst Castle, and a drive up that state's spectacular coastal highway. The turns were both frightening and exhilarating, especially around Big Sur. Monterey, Pacific Grove and Carmel were gorgeous; the air was clean and fresh; the quality of light remarkable. The sequoia trees near Mount Whitney were awesome, and John Muir’s redwoods were equally majestic.
The climate was wonderful. When we landed it was 55 degrees with no humidity. In August. Most of us, I think, especially those of us who spend a lot of time in the South, dream about being able to enjoy a summer afternoon without stifling heat and bugs. You can do that in California. There was a sense then that California was a special place, a desired location to visit or live.
Times change, though. A dozen mudslides and twice as many wildfires later, the Golden State has lost some luster. Especially if you want to own a home there. Consider this: the median price for a home in San Francisco recently rose to $1.6 million, or double the cost from only five years ago. Are wages keeping up, so that most folks can afford that increase? No way.
So it's no surprise that Californians are bailing. In addition to being one of the most highly taxed states, most folks simply can't afford to buy a home. Home prices are high throughout the state. So where are Californians moving? Everywhere, apparently. But especially to places like Las Vegas. It's close by, and home prices are still rebounding from the Great Recession. The median list price for a home in Vegas in April of 2018 was about $280,000. Eight per cent of those Californians who left the state in the first quarter of 2017 landed in Las Vegas.
From 2006 to 2016, California experienced a net decrease of a million residents. Contrast that with a state like, say, Florida, which over the same 10-year time span grew from a population of 18.17 million to 20.66 million, a net increase of almost two and a half million residents.
Many people still desire to own a house, and paying a million dollars for a two-bedroom starter home is unappealing to most, even if you've landed a high-paying tech job.
Margaret R. McDowell, ChFC®, AIF®, author of the syndicated economic column “Arbor Outlook,” is the founder of Arbor Wealth Management, LLC, (850.608.6121 – www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin.