SAN JOSE, Calif. (KRON) — Over the last year, the coronavirus pandemic has changed what we call home, and as a result prompted many people to rethink where we want to live.
For some Bay Area residents, it was time for a change.
“There’s a great reshuffling in American housing, where for the very first time many office workers have become untethered from physical locations and they’ve chosen to relocate to areas that better suits their needs,” says Chris Glynn, Zillow economist.
“The pandemic has re-emphasized the value of home, it’s a place that we have collectively spent all of our time since March of 2020, it’s been the center of our lives, and a place we sought shelter from a very chaotic and uncertain public health situation.”
Zillow’s 2021 Mover Report shows more than 1 in 10 Americans say they have already moved in the past year, either by choice or by circumstance.
San Francisco came in 5th as top metro area for net outbound moves, showing most residents have moved to Seattle, WA, Austin, TX, and Portland, OR.
“One of the things we are seeing in the San Francisco numbers is that there are additional people who are choosing to relocate within the Bay Area, moving away from that downtown urban core of San Francisco and further out into the suburbs,” says Glynn.
So where are people coming from or going? Here’s what Zillow says:
Top destinations/ top origins
|Movers from SF: Top 10 Destinations||Movers to SF: Top 10 Origins|
|Seattle, WA||Chicago, IL|
|Austin, TX||New York, NY|
|Portland, OR||Washington, DC|
|Phoenix, AZ||Seattle, WA|
|Denver, CO||Boston, MA|
|New York, NY||Philadelphia, PA|
|Chicago, IL||Los Angeles-Long Beach-Anaheim, CA|
|Washington, DC||Portland, OR|
|Houston, TX||Austin, TX|
|Atlanta, GA||Denver, CO|
A significant number of homeowners say they are more likely to move and sell their home as a result of the pandemic, representing an additional 8 million households that could enter a real estate market already driven by high demand.
But despite reports of a mass exodus out of the Bay Area, the reality is this – there just aren’t enough people moving in to offset the number of people moving out of the region.
“I think the mass exodus narrative surrounding San Francisco [Bay Area] is not accurate,” says Glynn.
“It’s not so much that people are fleeing the Bay Area, it’s that there’s not many new people coming into the Bay Area,” Glynn added.
“And so that’s the biggest difference between a place like San Francisco and Seattle for example.”
Over the past five years, the majority of Silicon Valley’s domestic out-migrants stayed in California.
According to the 2021 Silicon Valley Index put together by Joint Venture Silicon Valley, 29% remained in the Bay Area, 6% moved to the nearby Monterey area, 6% to the Sacramento area, 8% to San Joaquin Valley, and 14% to Southern California.
“There’s a difference in the real estate prices between the core, which is the peninsula and the south parts of the Bay, those are some of the most expensive real estate prices, the median home sale price is north of a million dollars,” says Russell Hancock, Joint Venture Silicon Valley CEO.
“There’s more affordable housing in the East Bay and even beyond that too, if you were to go over the Altamont Pass,” Hancock added.
“You have really quite affordable real estate, so people are taking advantage of that.”
According to the index, counter-migration is also occurring with more people moving out of Silicon Valley than moving in, resulting in a net outflow of approximately 5,100 people per year.
In contrast, there are fewer Silicon Valley residents moving to San Francisco than moving in, resulting in a net inflow from San Francisco of approximately 2,500 people per year.
“I think the high taxes that we have with 13.3% state tax rate right is at the top marginal rate, there’s talk of that going up, and that is just scaring a lot of folks,” says Paul Getty, president and CEO at First Guardian Group in San Jose.
“Particularly some of our older investors that have a lot of equity tied up in California property, they want to cash out now and reinvest, so they can have much greater retirement income.”
Getty tells KRON4 News many Bay Area employees have moved out of the region entirely as work from home has become available and as a result companies have reaped the benefits of doing so.
“Many people now are still getting California paychecks but they’re living in less expensive areas like Boise or Atlanta,” says Getty.
“They’re moving out of the more expensive areas because they can and employers are actually finding them to be more productive in a lot of cases because they don’t have to commute back and forth on a daily basis.”