by Cole Lauterbach
A popular gripe about Californians moving into nearby states is they bring their politics with them. The newest complaint could be they’re bringing high home prices as well.
Property data provider CoreLogic released its monthly Home Price Index on Tuesday, reflecting May values. It showed home prices in every state increased from average listing prices in May 2020. In states with a disproportionate number of relocated California residents, home prices increased well above the national average of 15.4 percent.
Of the 165,355 California taxpayers that left in the tax year 2019, 29,050 taxpayers and their dependents moved to Arizona. CoreLogic’s report showed Arizona’s home prices grew 23.4 percent from May 2019 to May 2020.
“Strong buyer demand coupled with scarce for-sale inventory have accelerated home-price gains, with the Phoenix metro especially hot,” CoreLogic Chief Economist Dr. Frank Nothaft said. “With mortgage rates continuing to hover near 3%, we expect home prices to continue a double-digit rise through the summer.”
Arizona’s increase was a greater increase than every state but Idaho. Residents there are dealing with a 30.3 percent home-price hike from the same period. Recent U.S. Census Bureau migration data showed Californians comprise the majority of newly branded Idaho residents. Utah, the CoreLogic report said, had a 20.4 percent year-over-year increase as “home buyers seek out more affordable locations with lower population density and attractive outdoor amenities.” Census numbers show Californians account for the lion’s share of their new residents as well.
The increased demand from well-heeled California ex-pats and others also is creating record home inventory shortages.
“Valley-wide, we normally have 20-25 thousand active homes on market,” said Jan Leighton, president of the Arizona Association of Realtors. “As of this morning, we have 5,799.”
Leighton said people used to sell their homes in five to seven years, but they seem to be moving more toward selling after seven to 10 years.
Arizona homeowners have been getting frequent calls for months from companies willing to offer cash for their properties, presuming they will continue only to increase in value.
The increased prices also could push first-time homebuyers back to the sidelines, meaning the demand would be prolonged.
“First-time buyers are hitting a wall in many places around the country as the pace of home price rises outpace the benefits of lower borrowing costs. Younger and first-time buyers, including younger millennials, are faced with the challenge of having sufficient savings for a down payment, closing costs and cash reserves,” said Frank Martell, president and CEO of CoreLogic. “As we look to the balance of 2021, we expect price rises to continue which could very well push prospective buyers out of the market in many areas and slow home price growth over the next year.”
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Cole Lauterbach is a regional editor for The Center Square covering Arizona, California, Oregon, and Washington. For more than a decade, Cole has produced award-winning content on both radio and television.