Did you know California has lost over 138,000 residents over the past 12 months to neighboring states? The U.S. census data show people are leaving the state because they are frustrated with high taxes and the high cost of living.
Even though the weather can’t be beat in Southern California, the trade-off for lower taxes and more affordable housing is beginning to cast clouds over the state. Personal income state tax, 40-cents-per-gallon gas tax, limits on deductions of state and total taxes, mortgage interest deduction limits -- more people moved out of California than in to it. The two largest groups to leave are the age group 55-64 at 7.3 percent, and the 65-plus group at 13.4 percent. Remember, 15-20 percent of all the wealth is contained within these age groups.
But where are they going? Number one is Texas; number two is Arizona; and number three is Nevada.
The guest speaker last week during a Flag Day dinner was Arizona Governor Doug Ducey, who encouraged California to keep sending residents to his state. He welcomes each and every one of them with open arms.
Last week, Chapman University celebrated 40 years of biannual economic forecasts. On stage, Jim Doti, who I affectionately refer to as the “Walt Disney of Orange,” managed to deliver an economic forecast to a packed house without anyone nodding off. He projected that, while the population was decreasing, over 20,000 people live outside of Orange County but commute to work here everyday. (Have you driven the 91 freeway lately?) A robust economy, low unemployment, and brisk consumer spending created the perfect storm for the Orange County economy.
Chapman University predicts, in 2018, a seven percent rise in housing prices. The average price of an Orange County home is $733,113. If your home has beach access, add another 36 percent to the price tag. For baby boomers, most of you have a self-made retirement. Millennials, maybe you will find a lower cost of living out of state, and property values will allow you to find affordable housing. Either way, the climate here and the proximity to the beach will continue to make the high cost of living worth it.
Domestic migration …
where are all the people going?