Angelenos Are Moving to These Cities
As the trend of Californians leaving the state in what is often described as an “exodus” continues, so too are Angelenos flocking from the city to more affordable destinations. Despite the ever-increasing minimum wage–in fact, West Hollywood has the highest minimum wage in the country at $19.08 per hour–this attempt at providing a higher base pay has failed to offset the rising cost of living in this metropolitan area.
The median cost of housing in Los Angeles has increased from under $800,000 at the start of 2020, to $999,000 in October 2023. It’s now 141% higher than the national average for median housing costs. The estimated cost of living is likewise 49% higher than the national average as the cost of nearly all essentials from gas to eggs is notably more expensive than the national average.
In response, data collected from RedFin.com users shows that the primary destinations for migrating Angelenos are San Diego, California, and Las Vegas, Nevada. While a sizable number have fled to exceptionally more affordable areas in rural inland California, the largest portion are in fact going to these other major urban cities.
San Diego is modestly more affordable than Los Angeles, with a median cost of housing of $914,000 and a comparable cost of living that is 42% higher than the national average. Currently, the minimum wage in San Diego is $16.30, lower than the $16.78 minimum wage in most of Los Angeles, but this figure will rise to $16.85 at the start of 2024.
Meanwhile, Las Vegas’ median cost of housing is $412,000, making it a natural destination for those who want to stay in an urban area for significantly less money. Expectedly, this city’s minimum wage is grossly lower than Los Angeles’ and San Diego’s at $10.50.
None of these cities have a livable minimum wage, but what many people take advantage of is the benefits of moving from an area with high housing market values to an area with low housing values. This allows homeowners of even relatively low-valued homes in a city like Los Angeles to sell their homes and use that money to buy a larger home for the same if not less money they sold their first home at.
This strategy is particularly effective when moving to a developing area–this is why many move from Los Angeles to rural areas in California. Not only can the homeowner get an immediate upgrade in the quality, but the value can then increase over time as the housing market of the area develops. This is an investment that for many has allowed them to accumulate wealth while others bet on the rising housing value of areas that did not develop as they hoped.
The ability to make this bet, however, is available only to homeowners with a house to sell. This is not an option for the 874k Los Angeles households that are renter-occupied. These too may choose to leave Los Angeles in hopes of better job prospects and lower rent prices outside the city.
