No mass exodus from the Golden State

Chris Palmeri

You may have read stories about Californians bailing from the bubble. They are selling their sharply-appreciated homes, pocketing the proceeds and renting apartments or moving to cheaper neighboring states. It's a nice tale and true no doubt in some cases, but it's hardly a megatrend. The latest data from the California Association of Realtors shows that while the number of homes on the market is up, it's up only modestly so. There were 41,900 homes for sale in the Golden State in June, 5% more than last year. Divide that by that by the number of homes purchased and it now takes 2.7 months to sell a house. The long term average is still much higher: 6.5 months. Prices also remain strong, up 16% in June to a median of $542,000. Why aren't more people cashing out? "Where else are you going to go?" asks CAR economist Leslie Appleton-Young. She notes that even trading into a new house can mean a big hike in property taxes thanks to California's Proposition 13, which links taxes to the sale price. So it seems the number of Californians willing to sell their home and downsize to an apartment remains small.

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