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Residents Are Leaving San Diego for Cheaper Areas

CoStar Market Insights: San Diego’s Thinning Migratory Trends
July 2, 2018
San Diego County has largely stopped growing on the back of in-migration.

The market’s population growth was driven almost entirely by natural growth in 2017 -- that is, births over deaths. San Diego grew by about 0.6 percent last year, below the national average of 0.7 percent and lower than the long-term San Diego norm closer to 1 percent.

What is noticeable is that domestic in-migration largely dried up, as residents of San Diego left for other areas of the country. According to the U.S. Census Bureau, more than 42,000 San Diego residents left the area for the Inland Empire over the five-year period ending 2016. This was followed by 15,000 residents leaving for San Francisco and close to 9,000 residents leaving for Phoenix.

While San Francisco might attract tech workers away from San Diego, Phoenix and the Inland Empire both offer comparatively cheaper housing costs and strong job markets.

During that same five-year period, migratory trends by income bracket offer considerable insight into the rising cost of living here. Migration was negative for households earning between $25,000 and $50,000 and it was only modestly positive for those households bringing in between $50,000 and $100,000.

This suggests that the middle-class is being squeezed out. The strongest in-migration trend by income was for the over $100,000 crowd, followed by those earning less than $25,000 - largely consisting of those moving to San Diego without a job.

Affordability is certainly one aspect driving declining migratory trends. For median renter households, earning about $48,000 per year, average rents in San Diego -- $1783 per month -- siphon 45 percent of gross income. Median for-sale home prices sit above $600,000 for the first time. The City of San Diego released a study showing that 70 percent of San Diego residents would be unable to afford today’s median home price.

Home prices are several hundred thousand dollars lower (about $400,000) -- and average rents sit $200 per month below -- in Southwest Riverside/Temecula compared to San Diego.

It’s only natural for residents to pursue more affordable living means while still being able to commute into San Diego, even if the commute can stretch past 1 1/2 hours.

Joshua Ohl, Senior Market Analyst  CoStar Group   



CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.

Learn how CoStar Market Analytics can add to your market knowledge, helping to minimize risk and maximize returns.
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