Los Angeles renters are looking for a way out, while few outsiders are looking for a way in.
According to a recent Zillow report, L.A. residents are the most likely to be checking out rentals in Las Vegas. They also make up the largest out-of-town demographic window shopping for rentals in Phoenix, Salt Lake City and San Diego.
For L.A. renters struggling to make ends meet, a move to one of those cities could set them up for better lives, said Zillow’s Chief Economist Mischa Fisher.
“You are going from an area where, on average, you’re severely rent-burdened, to an area where not only can you afford rent, but you’ve got considerable savings left over, and it’s still sunny and warm,” he said. “You don’t have the ocean, but it has other benefits.”
For people looking to eventually buy a home, moving to a city like Las Vegas can be the first step toward that goal.
“You get the immediate savings if you’re going to Las Vegas, but it’s also going to be a more sustainable place to eventually buy as well,” Fisher said.
Housing expert Shane Phillips at UCLA’s Lewis Center for Regional Policy studies said people from L.A. are also moving to Southern states such as Florida, Georgia and North Carolina, which have been building more housing.
Even the Midwest is seeing upticks in people from the L.A. metro going there in search of affordability.
“Given that the Midwest is not a particularly strong market, not great job prospects for many people, I think it’s just notable that there’s outmigration to there,” Phillips said.
The Zillow report showed that rentals from the L.A. metro area attracted the lowest percentage of outside search traffic after New York. Only around 1 in 4 searches looking at L.A. rental properties came from outside the region. Close to half of the Zillow clicks to view rentals in Austin, Texas, came from outsiders.
The San Francisco Bay Area, which had been losing citizens as well, seems to be building some buzz. Around 45% of people looking at San Francisco and San José properties are from elsewhere.
While L.A.’s population has steadily grown for years, much of that growth is from immigration from abroad that has outweighed the number of people leaving.
Phillips said the exodus comes back to the lack of new housing in Los Angeles.
For years, the L.A. housing market has steadily grown more unaffordable, and no new buildings are being added. As people look for more space and continue to work from home more, there are fewer options in L.A.
“If you’re not increasing the supply of housing in your neighborhood, you are probably losing population,” he said.
For people who still want to stay closer to home, Zillow search trends show that Riverside is the most popular local area for rentals. More than 20% of rental searches in Riverside come from L.A. residents.
Fisher said Riverside can still offer the Southern California lifestyle while easing some of the price burden renters face in the L.A. metro area.
“If you’re thinking about lifestyle in Riverside versus L.A., it’s going to be more similar because it’s close,” Fisher said. “You’re going to, on average, have about 3% more of your income available to you just going from L.A. to Riverside.”
For people hoping to buy but still stay in Southern California, Phillips said that Riverside, while still very expensive, is the best option in the area.
“It’s far away, it’s hot and it’s still pretty expensive,” he said. “There are all these downsides, but if you’re really set on owning a home, and you don’t make $150,000 or $200,000 a year or more, then that’s one of your only real options in Southern California.”
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