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California in the rearview mirror

While California slips deeper into recession people who can leave are leaving in droves!

According to some statistical data many of them are headed to the Midwest and more specifically Missouri and Kansas. Other states like Colorado and Texas have benefited from the California exodus also.

In November of 2005 Mike Sinclair for The New York Times penned a piece chronicling the California exodus including the story of at least two families that had relocated to the Kansas City Area. They saw the opportunity to get much larger more affordable housing and to increase their standard of living by decreasing their overhead.

In my own Real Estate business I've seen several trends come out of California over the last few years. In the years when California real estate was drastically overpriced, California investors were flocking to Kansas and Missouri to buy investment real estate.  In recent months the trend has been I'm hearing from more California residents looking to move to the Midwest.

The Los Angels Times reported in December of 2008 that the trend continued. Both articles noted that the trend started in the 90's with the DotCom bust. Then it continued because the cost of housing was just too high for most to afford.

But the trend has continued to increase, even with the decrease in home prices in the Golden State people are moving out. Now it is estimated that nearly 150,000 people are leaving California a year! In an Associated Press article January, 2009 they noted the root causes of the problem.

  • Rising Taxes
  • Illegal Immigration
  • Traffic Jams
  • Rotten Schools

Those top the list of the complaints of many leaving the state. Several of the statistics cited come from United Van Lines tracking of inbound and outbound shipments, which may be a microcosm of the details. Not everyone moving, not even a majority of families moving use one particular shipper; besides the data shows a the numbers practically the same for inbound and outbound shipping (49%-51%).

There is even some speculation that if the Census numbers for California are low enough they could lose a seat in the House of Representatives!


So why Kansas, Missouri, Texas and Colorado?

Lower cost of living, better schools, less stress, job opportunities. Your typical Midwestern home; according to a National Association of Realtors study, shows that the median home price for the Midwest is lowest in the nation.

As many families are looking to reduce expenses, reducing your housing costs may be the single biggest cut you can make.

What you paid for that two bedroom walk-up in San Fransisco may buy you a farm in Missouri!

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