Are exiting Californians pushing up house prices elsewhere? This data says no

The pandemic may not have spawned an all-out urban exodus, but it has driven some residents of America's most populous state to seek shelter elsewhere.

California, with its increasingly unaffordable locales and worsening housing shortage, had a net population loss of about 173,000 people between July 1, 2020, and July 1, 2021.

Move-outs weren't totally to blame — fewer move-ins from other states, a drop in foreign immigration and births plus pandemic-related deaths played a larger role than people fleeing the state because it got too expensive, experts say.

Still, thousands of people did move out of California's pricey coastal cities in search of cheaper living.

Should residents of those destinations blame Californians for the home price increases they're experiencing? In most cases, no.

Net move-ins accelerated across Sun Belt cities like Houston, Dallas, Phoenix and Austin, Texas, during the pandemic, but housing construction is keeping up, and other factors account for the bulk of home price increases in those markets.

A CBRE analysis of U.S. Postal Service data paints a clear picture of migration patterns across the country, comparing 2019 to 2020 figures.

Notably, people who moved from California's urban centers during the pandemic didn't go far. More San Francisco residents headed for nearby Sacramento in 2020 than in 2019, while more Los Angeles residents headed for lower-cost cities inland, such as Riverside.

When Californians did move across state lines, they most often went to midsized cities in Texas, Arizona, Nevada, Idaho, Colorado, Washington, Oregon and Florida.

These movements seem to reinforce the narrative that deep-pocketed California transplants are wreaking havoc on once-affordable housing markets and defacing the down-home culture.

But a look at housing supply should offer relief — at least on the issue of home prices. In several of the most popular destinations for former California residents, there's adequate housing to go around.

That's according to the National Association of Realtors (NAR), which tracks the number of single-family homebuilding permits issued monthly in the country's metro areas. Coupled with housing starts, these figures are a leading indicator of a local market's ability to meet buyer demand.

Consider Austin, where the number of move-ins from California increased by about 17% from 2019 to 2020. In total, just over 4% of Austin's newest residents — renters and homebuyers — came from California.

One might assume that this uptick in demand would put major strain on the housing market in Austin, a city of fewer than 1 million people. Alas, NAR's data shows that construction is keeping up. For the 12-month period ending June, Austin was among the top five metro areas in the U.S. for the number of single-family building permits issued.

Loudenback writes for Rate.com.