Remote work, tighter budgets: Why are people moving out of California and where are they moving to?

Photo by Ketut Subiyanto from Pexels

When 2020 began, moving out of state was a passing joke between Darell Gabriel and his wife Kriselle, an idea they toyed with but didn’t necessarily take seriously.

Then, the pandemic hit. Kriselle was laid off from her job in marketing. They felt the pinch. For Gabriel, moving out of state became more attractive.

On June 15, he quit his job. Gabriel and his wife packed up their belongings and said farewell to their condo in East Long Beach.

“It was just surreal at the moment,” he said. “Like, ‘Dang, are we really doing this?’”

Like thousands of Californians, they drove a moving truck East on the I-15, passing through the Mojave Desert and continuing on until the glow of the Las Vegas strip was in sight. 

“We were sort of like, ‘The world is going crazy right now. We might as well go crazy with it and do something different,’” he said. 

Gabriel and his wife are not alone in their choice to leave California. 

From March to October, more people moved out of California than moved in, according to an analysis of USPS address change data by the National Association of Realtors. The migration represents a record-low for the state, the 12th time since 1900 that the state has had net migration loss

Of those who left California between March and October 2020, 18.9% moved to Texas and 18.7% moved to Nevada, according to the analysis. Oregon, Arizona and Florida were other popular destinations.

Signal Hill real estate agent Richard Daskam has watched this migration unfold. He didn’t see much movement out of Long Beach when the pandemic first began. Then, as case numbers began to surge in late summer, he saw a wave of residents selling their coastal homes and moving out.

“The biggest trend I’m seeing is people just moving out of state,” he said. “The last five closings, they left the state.”

Daskam said his clients are leaving Long Beach for a number of reasons. Some are like the Gabriels, moving to a cheaper state to get a bit more bang for their buck. 

The Gabriels exchanged their two-bedroom, two-bathroom condominium in East Long Beach for a three-bedroom, two-bathroom in Las Vegas. 

For around the same price, their new condominium also includes a garage, an in-unit washer/dryer and a substantial boost in square footage. 

“Our money just stretches farther out here,” Gabriel said. 

But that trend works both ways. While some may find Long Beach pricey, residents who live in more expensive areas may see Long Beach as a cheaper option comparatively. 

“We are seeing people coming out of LA and moving into Long Beach, or getting away from that downtown feeling into the family neighborhoods,” Daskam said. “They’re leaving their tight quarters up there into a nice three-bedroom, two-bath property here.”

The National Association of Realtors analysis breaks down not only state-to-state movements but also county-to-county migration. 

Of those moving out of Los Angeles County, most are leaving to San Bernardino County, followed by Orange County and Ventura County, all of which have generally lower costs of living.

These flows also operate in the opposite direction. Of those moving into Los Angeles County, most are from those same three counties. 

Most people who moved into California last year were from Texas, followed by Arizona, Washington, New York and New Mexico.

The State of California is one of the top ten states with the greatest net population loss from March 20, 2020 to Oct. 20, 2020. (Infographic by National Association of Realtors)

Workplace trends are also influencing people’s desire to move. As more businesses transition to fully remote work, residents are no longer tethered to their workplace. 

Without mandatory commutes to the office, some are questioning whether California’s high cost of living is worth the trade-off. 

“Those that seem to be able to work remotely, they’re taking advantage of that and just getting out of the state because of the taxes and the congestion,” he said.

The Gabriels work in marketing and media, both of which can be done remotely. 

“It’s definitely easier right now, to make these sorts of moves happen,” Gabriel said. “Obviously working from home wasn’t a thing at all, for most people. But with the pandemic, it was helpful to transition to that sort of lifestyle.”

Daskam said that people aren’t just moving their primary residences. They’re moving their investment properties out of state as well. Fearing increased capital gains taxes, some homeowners are exchanging their expensive coastal homes and reinvesting in real estate in cheaper markets.

One of his clients exchanged a single condominium in Long Beach for 20 investment properties in Tennessee. 

Gabriel doesn’t know if he’ll stay in Las Vegas forever. He misses Long Beach, his longtime home, but knows that his move was for the best, at least for now. 

“The world is resetting right now […] Last year, we didn’t know the pandemic would last this long,” he said. “Now, we’re holding on, waiting for life to return.”

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