One in four Californians considering a move

Jim Wasserman

Thursday, Nov. 18, 2004 | 11:06 a.m.

SACRAMENTO -- High rents and rising home prices are pushing one in every four Californians to consider moving elsewhere in the state or leaving California entirely, according to a new statewide survey on places people call home.

While Californians value their quality of life near ocean shores and mountain views, the survey released Thursday shows nearly one-third of those under 35 are considering moves toward cheaper prices and that 52 percent of adults are very concerned their children won't be able to buy homes in their part of the state.

Even many homeowners now see little upside to rising prices that have greatly inflated their property values, believing they couldn't afford to buy another house in their own neighborhoods, said Mark Baldassare, the study's author and statewide survey director for the Public Policy Institute of California.

"We're at a point where it's very hard for people who are moving from other states to think about coming to California," Baldassare said. Instead of being optimistic about life in California, a new generation "coming into the owning stages of their lives ... are exactly the people who are talking about moving elsewhere.

"You're talking about your work force. You're talking about your future," he said.

Industry housing researchers said the flow of people from California is not likely to subside anytime soon.

"Over the next 10 years, there will be an outflow of people from California east," said Tim Sullivan, principal in charge of real estate consulting at research group Hanley Wood Market Intelligence, based in California.

Many of those people are moving to Southern Nevada, said Sullivan, speaking at Hanley Wood's quarterly market presentation. He said of in-migration to Las Vegas, 60 percent of the people are from California.

The reason is Las Vegas' home prices. While many in Las Vegas have decried the huge increases that have price many already here out of the market, the valley's home prices are a deal compared with California.

In Orange County, the median price of a new home in third quarter 2004 was $1.26 million. Other median new home prices during the same time period included $413,521 in Los Angeles, $391,759 in Riverside, and $695,350 in San Diego. That's compared to median new home price in Las Vegas of $312,740, Hanley Wood reported.

Resale home prices are also higher than Las Vegas' resale prices. In Orange county, the median price of a resale home in the third quarter of 2004 was $515,000. In San Diego, the median existing home price was $475,000. In Las Vegas, the median resale home price was $237,000, Hanley Wood reported.

The Public Policy Institute's survey, the most comprehensive of its kind in years in California, reveals the moving-out sentiment is highest in coastal areas and that many are acting on it. The PPIC recently reported that since 1995 more than 350,000 coastal Californians have moved to the less expensive Central Valley.

The PPIC surveyed 2,502 people from Oct. 21 to Nov. 1 in English, Spanish, Chinese, Korean and Vietnamese. The survey, funded by the Irvine, Packard and Hewlett foundations, has a margin of error of 2 percentage points.

California's traditionally high mortgage costs are also further discouraging renters, the survey reports. Only one in five who hope eventually to buy a house are confident they can do it.

The results dovetail with findings this month by the California Association of Realtors showing that only 19 percent of the state's households can afford the state's median-priced home of $465,000. That's a 5 percent drop from a year ago. Nationally, the median-priced home -- where half cost more and half cost less -- was $186,600 in September.

The results also come as California's builders push up more homes and apartments than any year since 1989. After building 134,000 single-family homes and 54,200 apartments last year -- 188,200 in all -- industry officials say they're on track to build 205,000 in 2004.

But while they fret about the high costs of housing and the shortage of affordable housing, many Californians also believe that's too many new homes, the survey shows.

Stressed by traffic, crowded schools and other consequences of growth in their neighborhoods, at least half believe state government is doing enough -- and even too much -- to encourage housing construction.

One in five likely voters told the PPIC that state government does too much to stimulate housing. And six in 10 believe the state should keep its tough environmental laws even if it discourages supply and causes housing prices to rise still more. Baldassare said likely voters tend to be homeowners.