California saw the highest share of homebuyers looking outside the state for their next home in the first quarter (Q1) of 2017, according to Redfin.

In Los Angeles, 88% of residents searched within their metro, a relatively high share. Of the 12% of searchers looking outside the Los Angeles metro:

  • 22% looked in San Diego;
  • 10% looked in Las Vegas;
  • 8% looked in San Francisco; and
  • 7% looked in Seattle.

In San Diego, 81% of residents searched within their metro. Of the 19% of searchers looking outside the San Diego metro:

  • 45% looked in Los Angeles;
  • 6% looked in the Bay Area;
  • 5% looked in Seattle; and
  • 4% looked in Phoenix;

In San Jose, 80% of residents searched within their metro. Of the 20% of searchers looking outside the San Jose metro:

  • 22% looked in Sacramento;
  • 14% looked in Seattle;
  • 12% looked in Los Angeles; and
  • 6% looked in Portland, Oregon.

The Bay Area has seen a steady increase in residents looking for housing elsewhere. According to Redfin, 86% of Bay Area home searchers focused their search within the Bay Area in 2011. This has declined each year, to 77% in 2016.

The top destination for those looking to move outside their current metro is the next closest metro (e.g. Los Angeles to San Diego, San Jose to Sacramento). But cities in nearby states rank high, too.

Domestic migration trends highlight pricey California

The top destinations for Californians emigrating out-of-state include:

  • Seattle;
  • Las Vegas;
  • Portland, Oregon; and
  • Phoenix.

But just because home searchers are looking at homes in other states doesn’t mean they’re actually moving there — right?

In fact, more Californians leave the state than enter, for a net loss of tens of thousands annually. In 2015, California experienced a net loss of 77,000 people. Out-migration was at its highest in 2006, when nearly 300,000 residents were lost to other states.

While no exit survey exists for those moving out-of-state, a glance at the trends shows the most expensive areas tend to see the highest out-migration, with some exceptions. And California is one of the most expensive states to live in, with high housing costs, gas prices, taxes and other costs of living.

The good news: overall migration into California is still positive, despite the high rate of exit for other states. That’s due to the enormous number of international migrants into California. The state netted 181,000 new, documented residents from outside the country in 2016. This number is likely higher when considering undocumented immigrants.

Agents and brokers can prepare for this continuing trend by becoming versed in the extra hurdles international homebuyers often need to leap to relocate to California. Become a relocation agent and reach out to local companies that draw employees from out-of-state and other countries.

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