New technology is giving us access to data that we haven't had previously, and now showing the shifting patterns of households across the US. Not only is it exposing when and where they are moving, but it is tying it to certain demographics and psychographics that could be the foundation of some trends to keep an eye on. How will the recent trends impact the future of housing?
A decade ago, the communities inland from Los Angeles became the poster children of the housing bubble. As real estate agents urged clients to “drive until you qualify,” the communities of Riverside County filled with eager house-buyers who weren’t afraid of 90-minute commutes – each way.
Then the economy crashed, jobs dried up, the loosey-goosey mortgages people had relied on to finance their purchases stopped cooperating, and the exurbs emptied out.
Now, that trend seems to be back. Californians are fleeing the high-cost cities and heading inland. Is it a sign of another bubble? Or a confirmation that the cutthroat housing market is turning some pricey cities into gated communities?
One economist thinks the story is more nuanced that all that. The coastal exodus isn’t necessarily a return to the bad old ways. And while it is, in part, a reaction to the affordability crisis, Issi Romem, chief economist at BuildZoom and fellow at the Terner Center for Housing Innovation at Berkeley, says it’s healthy to see Americans on the move, in California and everywhere. The bigger question is: Where do they go, and what do they do when they get there?
Romem and a Terner Center colleague, Elizabeth Kneebone, published a study in October on people leaving the Bay Area.
In a blog post, they summarized their findings this way: “The San Francisco Bay Area exchanges people of all income levels with all parts of the country, but the origins and destinations of those coming and going differ substantially by income. Low-income residents are over-represented among those moving between the Bay Area and more affordable parts of California, such as the Sacramento region and the Central Valley, while those moving between the Bay Area to farther destinations—primarily large metropolitan areas in other parts of the country—tend to have higher incomes, especially if the move is to or from the Northeast.”
