Why Are So Many Residents Cashing Out of California?
Pasadena home values and prices are at an incredible 15-year high. Back in the summer of 2002, the median home price in Pasadena stood at $365k. Today, in the Fall of 2017, median home price in Pasadena is a towering $820k. Even buyers who purchased their Pasadena home in early 2009, after the post-recession low when the median price was $472k, are sitting on substantial equity.
As a Pasadena Real Estate agent, I often find myself having discussions with home buyers that ponder where to go after selling and home buyers looking to own property in Pasadena.
Although real estate prices always fluctuate and there is no way to predict the future, we can look at the experts for insight. CoreLogic, a real estate data powerhouse suggests the rapid growth may be coming to an end. CoreLogic Chief Economist Frank Nothaft states “You can’t have house prices grow at 7% year after year when income growth is 2-3% a year.” Though sellers are realizing serious gains from selling their homes at this 15-year market high, lack of affordable housing may very well cause the market to level off going forward, shrinking the gains sellers are currently pocketing.
I asked Bill Podley, my broker, four-time Pasadena Foothills Association of REALTORS President, and with over 43 years in the business, what he feels the future of local prices will be. He offered:
“While demand seems to be greater than supply - and we don't see that changing anytime soon - we do believe affordability issues will dictate buyers pulling back if prices continue to increase at the pace of the last few years. There is a limit to what people can afford to pay for homes and there is a natural ‘governor’ on prices if they climb beyond the financial means of a majority of homebuyers. My sense is that prices will level off in the year ahead with appreciation matching a more typical annual increase in the 3-5% range.”
Hitting the high-water mark for local prices makes many homeowners ponder selling, but buying back into the same regional market doesn’t reap a huge financial reward. However, “Cashing out of California” by relocating to another state can. By relocating, a seller can most often easily afford a wide range of move-in ready homes in an even longer list of potential cities and neighborhoods. In fact, relocation is more common than you think.
Los Angeles County saw 88,000 residents move to other areas. Two of those who left were Bill Clifford and Julie Titus. Newlywed and happy in with their Downtown LA condo, they enjoyed city walks with their pet St. Bernards (Pancakes and Smoky), the new restaurants, and an active nightlife. Yet this foursome yearned for open space. Home shopping in Los Angeles proved challenging; small lots, low inventory, and high prices limited their options and made relocation a strong consideration.
With family in the Pacific North West, their search brought them to quaint Ashland, Oregon. They quickly fell in love with the city; its farmers-markets, plentiful hiking, and friendly inhabitants. The decision to move was an easy one. After renting for a year they listed and sold their condo in downtown LA. The near seven-figure result of the sale allowed them to put just over 50% down on their new home in Ashland. Bill and Julie now enjoy their four bedroom, two bath house with 2,150 square feet and a half acre of land just outside of town. Thriving culture, organic farming, and home to the renowned Shakespeare festival, Ashland offered them a taste of culture they had grown accustomed to.
Bill and Julie are not alone. Altadena residents, Jon and Cynthia Wargo, also embraced relocation and a major real estate windfall. Faced with job relocation to Charlotte, North Carolina, the Wargos cringed at letting go of their classic craftsman. After a brisk sale for $975k, they were able to buy 4,000+ square feet of home on a lake in Charlotte for under $500k. Ranked number 14 of the top 100 places to live in the US by US World News Report Charlotte North Carolina is home to the 100-acre Freedom Park, a multitude of museums, and a thriving city center.
Empty-nesters looking to down-size, advancing options in telecommuting, and those in need of more space can relocate with a significant benefit to their bank account.
The substantial amount of money that can be gained from selling your Bungalow Heaven home could equate to an amazing property in another progressive city and still leave hundreds of thousands landing into your bank account. But where do you go?
Finding your Ashland or your perfect Charlotte will take a little research. US News and World Report helps by publishing their top 100 cities to live in every year. To determine this rank, they look at the largest metro areas for job markets, cost of living, crime rates, education quality, top-notch health care, and more. Each category is then weighed against survey data from people across the nation who have been asked what is important to them when considering to move to a new city. A simple Google search can shed honest light on the many options one has.
If you are a fan of culture and hip city living there is Austin, Texas. If your dream is to hike, fish and hunt, every day, there is Denver, Colorado. History buffs and major patriots will love calling our nation’s capital home. If you need down-home friendliness, Fayetteville, Arkansas could be the home for you. Those drained by the heat will quickly embrace Seattle, while those that bathe in the sun will be enchanted by Phoenix, Arizona. If you would like to see some examples of what your Bungalow Heaven real estate dollar could get you in some progressive cities, see our guide here. So whether you need land or lifestyle, there is a city for you.
Relocating to a new city is no easy task. We’ll leave the discussions with friends and family up to you, but through the Podley Properties Relocation division, we can easily connect you with a vetted local real estate expert in any town from Boston to Barcelona. Over the past 40 years Podley Properties has helped hundreds of Pasadena families relocate to amazing cities all around the globe. If you are considering relocation and need guidance or insight on selling your local property, feel free reach out to me, and we can start the conversation.
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Michael Robleto
REALTOR®-Compass
Michael Robleto is a REALTOR® with Compass. His analytical and open approach to sales has served his clients well in his twenty years of sales. Michael blends kindness and compassion with a modern technology-driven approach to real estate. You will be hard-pressed to find an agent that will work harder to protect the interests of buyers and sellers.
Michael leverages his personal passion for historic architecture to provide his clients unknown insight on the pros and cons of older homes. Michael grew up in an older Bungalow home, has lived in California all his life and has spent 23 years in Southern California. He often writes on real estate and Pasadena related topics which can be found on Facebook, YouTube, Twitter and Instagram under the common profile name of his blog BungalowAgent or at www.BunaglowAgent.com/blog.