Net Outward Migration from Los Angeles County to Orange County
In the last blog on recent trends in homebuyer mobility we found that high housing prices in two Northern California counties (San Francisco and Alameda) had been a principal cause of people moving to counties with lower home prices. There was net outward migration from higher-priced counties to lower-priced counties as home shoppers searched for more affordable homes. This blog extends the analysis to owner-occupant homebuyer mobility in Los Angeles and Orange Counties in Southern California.
Among Los Angeles County residents who applied for home-purchase mortgage loans during the first ten months of 2016, about 24 out of the 100 households were buying outside of the county. Figure 1 summarizes the net flow of Los Angeles County home buyers during the first 10 months of 2016. About one-third of the net outflow, representing about 6 percent of current residents who want to buy, are buying out of state. More than one-half of the net outflow represents households buying in more affordable neighboring counties, such as San Bernardino, Riverside, Ventura, Kern and San Diego. In fact, San Bernardino’s median sale price was less than half of Los Angeles’s (see Figure 2). In contrast, about one-tenth of the net outflow represents households buying in Orange County, which is more expensive than Los Angeles County. The median sale price in Orange County was 17 percent higher than in Los Angeles County. The move to Orange County from Los Angeles County could be for various amenities such as better schools, less crime, newer neighborhoods and lower density. According to a recent U.S. Census Bureau report, the two largest county migration flows were Los Angeles County to Orange County and Los Angeles County to San Bernardino County.
Similarly, for Orange County residents, 25 out of 100 households looking to buy during the first ten months of 2016 took out a loan application on a home outside of Orange County, generally in lower-priced areas. Almost one-half of the net outflow, representing more than 6 percent of the current residents who want to buy, were buying out of state. During the first ten months of 2016, households buying in Riverside County represented more than one-third of Orange County’s net outflow (Figure 3). The median sale price in Orange County was almost double Riverside County’s. About 14 percent of the net outflow was buying in San Bernardino (8 percent) and San Diego (6 percent) counties.
In both Los Angeles and Orange counties, buyers were attracted to more affordable counties such as San Bernardino, Riverside, and San Diego. Similar to San Francisco and Alameda counties in Northern California, high housing prices in Los Angeles and Orange counties has been a principal cause of the net outward flow to lower-priced areas. However, the greater number of applicants looking to move from Los Angeles County to Orange county, compared with the other way around, might reflect preferences for local amenities.
1 The blog on trends in homebuyer mobility for San Francisco and Alameda counties was posted on November 11, 2016
2 All Applications, accepted or not, through October 2016 were included in the analysis. Investors and second-home buyers were excluded in the analysis.
3 The Figure 1 net flow percentage is calculated relative to the total number of Los Angeles County residents that placed a home-purchase application. A positive (negative) value indicates net inflow (outflow) of home buyers to Los Angeles County. For example, “-6” means that the net loss of home buyers to another county equaled 6 percent of the number of Los Angeles County residents that applied for a home-purchase loan.
4 Based on the 2010-2014 American Community Survey. See http://www.census.gov/newsroom/press-releases/2016/cb16-189.html
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