As celebrities have left crime-ridden California en masse, the Democrat-run state has four of just 20 major cities in America to see house prices fall in the past year.
The median single-family home price rose four percent in the fourth quarter from the same period last year. The average one-family residence now costs about $378,700, according to the National Association of Realtors.
Only 20 of the top 186 markets tracked by NAR saw declines in the fourth quarter but experts suggest there may be more to come.
The west showed the lowest growth in the country at just 2.6 percent. Los Angeles has seen prices dip just 1.3 percent, but San Francisco had the biggest drop in the country at 6.1 percent, with neighbors San Jose at 5.8 percent.
‘A few markets may see double-digit price drops, especially some of the more expensive parts of the country, which have also seen weaker employment and higher instances of residents moving to other areas,’ said Lawrence Yun, NAR’s chief economist.
Only 20 of the top 186 markets tracked by NAR saw declines in single-family home prices in the fourth quarter but experts suggest there may be more to come
According to Yun, the slowdown represents a break from markets that saw a massive price boon during the pandemic.
‘A slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42% in the past three years,’ said Yun, noting these cost increases have far surpassed wage increases and consumer price inflation since 2019.
For example, San Jose had one of the biggest drops but is still the most expensive place to buy a home in the country at a median price $1,577,500. Prices peaked at $1.9million in early 2022.
Los Angeles, San Francisco and San Jose – all of which have seen huge problems with homelessness and crime in recent years – are three of the markets that have seen dips. Nearby Anaheim also showed a decline of 1.6 percent.
Other markets that have seen prices decline include Boulder, Colorado at 2.0 percent; Austin Texas at 1.3 percent; and Boise, Idaho at 3.4 percent.
In fact, Bay Area homes are selling for below their listing price for the first time in 10 years, according to the San Jose Mercury News.
Daryl Fairweather, Redfin’s chief economist, told the Mercury News that it represents the larger exodus from the region, driven by remote work, especially in the tech sector.
‘We may see this new normal where the San Francisco Bay Area looks more like the rest of the country,’ she said.
Austin, Texas is one of just 20 cities that has seen prices decline for single-family homes
The western United States as a whole showed the lowest growth in the country at just 2.6 percent
However, according to the NAR, what’s driving the exoduses are massive tax breaks elsewhere, especially as California Governor Gavin Newsom hikes taxes on the rich.
In fact, all of the markets with house price decreases are run by Democratic mayors, with the ones in California and Colorado run but Dem mayors and governors.
An article published by the Los Angeles Times earlier in February found that the droves of residents are moving to northern Nevada and causing issues with pre-settled residents who are seeing rising prices and traffic troubles.
The former-Californians are searching for the ‘perfect elixir — a California bender without the hangover.’
California residents and businesses began moving to the northern Nevada region back in 2014 when Tesla started building a battery pack factory outside Reno.
The Tahoe-Reno Industrial Center has become the world’s largest industrial center and covers 166 square miles.
The center is so expansive it is roughly the size of New Orleans, Louisiana.
The business moves and the COVID-19 pandemic spurred a new wave of Californians heading out east and recreating their California lifestyle as a ‘technology hub with comfortable communities, economic growth and mountain views — without California’s problems.’
Overall, single-family home prices are up nationwide at four percent, with the highest gains in the south at 5.3 percent. Many people have moved to Florida since the beginning of the pandemic.
In fact, seven of the top 10 cities in terms of rising prices were in Florida and the Carolinas, with Sarasota coming in at the second-largest rise of 19.5 percent.
Even the wealthy are having trouble charging top dollar for their estates, as evidenced by superstar actor Mark Wahlberg’s recent sale.
Wahlberg’s move to Nevada, which borders California, came after he put his astonishing 12-bedroom, 20-bathroom Beverly Hills mansion on the market for $87.5 million in April of last year.
California Governor Gavin Newsom recently announced another multi-billion dollar investment into solving the state’s radical homeless problem
Actor Mark Wahlberg has sold his longtime home in Los Angeles for just over $55million, over $30 million below the initial asking price, as he leaves in favor of Nevada in a quest to eventually build ‘Hollywood 2.0’ in Sin City
It took nearly a year to sell, but on February 17 it was announced that the property had been purchased by an unidentified buyer for just above $55million.
With people packing it in and heading for greener pastures, even more could flee with progressive Democrat assemblyman Alex Lee recently introducing a bill that would impose an extra annual 1.5% tax on residents – past and present – with a worldwide net worth above $1 billion, beginning in January 2024.
As early as 2026, the threshold for being taxed would decrease. Those with a worldwide net worth exceeding $50 million would have to pay a 1% annual tax on wealth, while billionaires would still be taxed 1.5%.
Worldwide wealth includes diverse holdings such as farm assets, arts and other collectibles, as well as stocks and hedge fund interest.
California already taxes the wealthy more than most states, with the top 1% of earners accounting for about half of the state’s income tax collections.
Homeless people are seen in Los Angeles, California on December 20, 2022
Nicole Ginsberg, 51, and her dog Lilly Day wait to see if they will be offered housing while living on 3rd Street in Venice on January 13, 2023
Eric Freeman, 59, cleans up the sidewalk in front of his tent during a pause from the rain storm in Skid Row where he has been living homeless, off and on, for the past 30 year in downtown Los Angeles
According to Forbes’ 2022 World’s Billionaires list, there are 186 billionaires living in California, down from 189 the year before, but far more than any other state.
In 2020, California had the greatest number of millionaire households in the US, with 1.14 million households having one million or more in investible assets.
While some are fleeing Los Angeles for the rise in taxes, others are worried that the homelessness, poverty and crime are on the rise as well.
Homelessness, and especially homelessness with the added facet of severe drug addiction, presents a significant issue for many major metropolitan areas in the US right now.
Especially in Los Angeles and San Francisco, where the drug-addled homeless populations have all-but overtaken entire areas of the cities, making it hard for people to run businesses and parents to feel comfortable with their children walking to school.
Late last year, members of the Los Angeles City Council voted to stop homeless people from setting up their tents within 500 feet of schools in the city.
The National Association of Realtors reported earlier this month that existing U.S. home sales totaled 5.03 million last year, a 17.8% decline from 2021. That is the weakest year for home sales since 2014 and the biggest annual decline since 2008, during the housing crisis of the late 2000s.
The rate for a 15-year mortgage, popular with those refinancing their homes, climbed this week to 5.51%, from 5.25% last week. It was 3.15% one year ago.
