Friday, December 17, 2021

Is there an Exodus out of Washington, Like California is Experiencing?

California has been exporting real estate refugees for decades now. States like Arizona, Nevada, Oregon, Idaho, Washington, and more recently Texas have been receiving people looking for opportunity or a better quality of life by the thousands. But is Washington State now slipping into the same pattern? Possibly; the data is suggesting that migration patterns are forming right here in Washington State that look a lot like what California's patterns were in the 1990s. 

In California as the major urban centers began to experience strong economic conditions with large employers paying top dollar for talent, the housing costs began to soar in places like Los Angeles, Orange County, San Francisco, and the Silicon Valley. Many people working in the middle class as tradespeople and service sector employees were priced out of the market and began migrating out to far flung suburbs to find affordable housing. Now the demand for those suburbs is so high these same middle class people are seeking out of state or out of the Bay Area opportunities in the above mentioned state and less expensive interior areas of California, like Sacramento and Fresno.

Here in the Evergreen State we have seen a similar situation in Seattle. If you look at Seattle, it looks eerily similar to the San Francisco Bay Area just a decade or two ago. Seattle long ago priced out the service sector and tradespeople who now tend to reside in these far flung suburbs, in Pierce County and Snohomish County. Many Seattleites are packing up and moving here to Vancouver as our high prices are still much lower than the Puget Sound region. The trend looks a lot like California did just a few years back.

But are Washingtonians leaving the state altogether? There is a demonstrably large number of Californians that have left the Golden State behind. Although the state has still seen minor growth that suggests some in-migration is happening as well, they did give up a house seat this past census. Is there a similar scenario here? We have to look at the types of real estate refugees to really find out. I think the answer is yes but on a smaller scale.

There are many reasons for real estate flight. Some people are leaving due to super inflated real estate values that severely reduces the quality of life. The Puget Sound region is definitely experiencing a California style long and slow commute for many middle class families. Here in Vancouver we have reasonable average commute compared to neighboring Portland and Seattle. But some still drive from Vancouver into Portland or even over to the west side for employers like Nike and Intel. That can become a real drag on lifestyle.

There are even political real estate refugees. Yes our divided country is getting so intolerant that some people choose to leave an area because they feel they are outvoted and don't like the direction things are going. This is not uniquely one direction. In fact blue voters are leaving red states and red voters are leaving blue states at relatively similar rates. 

But other than random job openings in far away places, most transplants tend to be seeking a better quality of life. That almost always comes down to affordability. Housing is just one part of the equation. You may remember I wrote a blog post a few months back about California counties compared to Clark County and most California Counties are LESS expensive for real estate than our county here. But in California even in a place where housing is affordable, everything else there is more money. Nearly EVERYTHING you buy comes at a premium in the Golden State. The cost of living index takes a variety of things into account and one will find Clark County Washington is not too far off the average for the whole country. There are places in California cheaper overall than Vancouver, WA but it is largely in areas that have lower housing costs. Housing is a big driver in this index and importantly, taxes and child care are not considered.

Take a look at this table National Average = 100:

  • Vancouver, WA         118
  • Seattle, WA.              167.8
  • Spokane, WA             98.6
  • Tacoma, WA              118
  • Kennewick, WA        98.3
  • Bellingham, WA       123.2
  • Portland, OR             132.4
  • Beaverton, OR          124.7
  • Gresham, OR            114.2
  • Salem, OR                102.4
  • Bend, OR                  131.3 
  • San Francisco, CA    244
  • San Jose, CA             215
  • Sacramento, CA        121.6
  • Fresno, CA                103.3
  • Los Angeles, CA       176.2
  • San Diego, CA          160.4
  • Redding, CA             107.8
  • Santa Rosa, CA         141.9
  • Riverside, CA            134.1
  • Las Vegas, NV.          111
  • Phoenix, AZ              108.7
  • Denver, CO                127.8
  • Salt Lake City, UT     122
  • Boise, ID                    116.5
  • Omaha, NE                 76.5
  • Des Moines, IA          78.7
  • Dallas, TX                  101
  • San Antonio, TX        89.8
Vancouver compares favorably to most places on the West Coast with Fresno, CA a notable exception. Have you ever been to Fresno? I'll pay more to live here... MUCH MORE.

I have noticed in my business a noticeable increase in people listing their homes and moving away for quality of life and/or politics. Sure that is anecdotal at best, but I am hearing this ring true with my colleagues across the area as well. I wouldn't say we have reached the California levels of exodus by any stretch, but Seattle has and Portland has. At this point for every person 'fleeing' Vancouver there are four or five more coming in from the Puget Sound or Portland.  Our housing prices here are lower than many other locations in the Pacific Northwest. We have a localized value proposition. But on housing compared to the national average we are nearly $100,000 higher. So for some, the grass seems greener in other pastures. We are however, looking solid for now.

No comments:

Post a Comment