Rob Knight

Priced Out

November 07, 2005

From this article in the New York Times:

The last few years appear to be one of the few times on record that California has lost domestic population when its job market was as healthy as the rest of the country’s, economists and demographers said.

“People are saying, ‘Even though I have to take a 10 percent wage cut to go to Vegas or Phoenix, it’s actually a wage increase,’ “ said Ross C. DeVol, the director of regional economics at the Milken Institute, a research group in Santa Monica, Calif. “They look at what housing costs here, and they’re making decisions to go elsewhere.”

Far more Californians are staying - for the weather, the landscape, the culture and other reasons - than are moving, but it is also clear that California is losing some of its attraction.

In a survey of 2,500 Californians last year by the Public Policy Institute of California, a research group, about a third of residents under 35 said the cost of housing was making them consider moving to a less expensive area. Two-thirds of those people said they were thinking of leaving the state.

It’s tough to think you cannot stay in the place where you grew up if you hope to own a home and have some space of your own. I love living in Santa Cruz, and I enjoy being close to my family. But it simply isn’t possible at the moment to stay here and buy a house without leveraging a significant amount of your income into an overpriced house. The area where my dad and mom bought a 1900 sq. ft. 3 bedroom house for $77,000 in 1977 now sports average home prices in the $800,000 range. And that is for a 28 year old track home.

My frustration comes from wanting to give back to the community from which you were raised. I’ve spent my entire life in the San Francisco bay area of California. Granted the bay area I grew up in is hardly represented by the post-internet boom bay area of today. And on a spiritual level I would regret never having spent time elsewhere. But it’s always nice to think you at least have a choice. The choice to live in the bay area ended at least 2 years ago. Currently the median home price in the valley is $705,000. At that price, the decision is easy.