California is burning. Five of the six largest wildfires in history have occured there in 2020 alone, leaving thousands of homes and businesses as ashy wastelands. Those displaced by the infernos are left to pick their lives up and put them back together.
But California home prices just got a lot more expensive. The large number of displaced families looking to rebuild their lives and move into a new home means demand has surged, supply is lower, and prices are skyrocketing. Real estate app Opendoor reflects a dramatic increase in the price of California homes over the last few months, signalling that the infernos are driving up the cost of home ownership.
đź’Ž Data Digs
- Opendoor data reflects that prices for homes in the state of California have increased by 28% overall across four major categories since May 15.
- The largest change has occurred in the "Home" category, with a 37% increase in the last four months. Multi-family homes and apartments also experienced significant price increases of 23% and 37% respectively
- Townhomes are the only category to have experienced a decline in pricing, dropping nearly 18% over the same period.
⚔️ Big Picture
- Demand for California homes has gone up dramatically in the aftermath of the wildfires as displaced families look to move to new homes, temporarily or otherwise. That apartments, homes and multi-family homes are the three listings to have increased in price while townhome pricing plummets is reflective of a larger trend of Californian's being priced out of the state's exorbitant cities.
- California has the deck stacked against it. An increasingly high cost of living is pushing people out of its cities and closer to dangerous wildfire territory. Though demand for homes is up in the aftermath of the wildfires, a dip may soon be around the corner if residents, locked out of cities by high prices and out of rural areas by fires, choose to leave the state. The shift to remote work for many major California tech firms could also push this trend.
- Though prices are rising even in the aftermath of terrible disasters, California is no longer the land of opportunity it once was. Stanford University's Hoover Institute writes that companies are fleeing the state en masse due to a number of reasons, including cost of operation, increasingly high taxes and more.
⚡ Get Ahead
- If you live in California and work for a company that is making a shift towards remote work, now is your chance to capitalize on it. The cheaper cost of living in many mid-sized cities combined with the shift to remote work has driven many workers away from New York and California.
- Linkedin released data today showing that New York and the Bay Area have seen as much as a 20% decline in "net arrivals" whereas mid-sized cities are getting a relatively even split of the same pool. Cities like Kansas City, Milwaukee and Jacksonville have seen increases in regular arrivals by up to 10%. Now's the time to make the call to move before rental and home prices go up there, too.
About the Data:
Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.