Individuals Are Leaving Los Angeles. That’s Nice Information for Residence Sellers in These Cities.
“I love L.A.!” exclaimed Randy Newman in a 1983 hit song. Now, some Angelenos are singing a different tune.
Los Angeles leads among U.S. metros where people are leaving. In the first quarter of of this year, the city saw a net outflow of 32,100 people, surpassing the exodus from New York, San Francisco, Seattle and Washington, D.C., the next five cities in the ranking, according to migration trends from Redfin.
Where are they going? According to U.S. Census Bureau data, Texas, Arizona, and Florida have been the biggest draws for Californians who have relocated. It’s a trend potential sellers should take note of, particularly if they live in prime neighborhoods attracting transplants and seeing price appreciation, from Summerlin, outside Las Vegas, to the Preston Hollow enclave in Dallas.
“People are moving here from Los Angeles unlike anything I’ve ever seen,” said Cyril Bijaoui, an agent with Corcoran in Miami. “There are a lot of California plates on the road.”
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For many affluent transplants, a motivating factor has been Los Angeles’s so-called Mansion Tax, which levies a 4% charge on sales above $5 million and a 5.5% fee on sales over $10 million. The tax took effect in April 2023. “A Los Angeles seller would have faced maybe 5%-7% in closing costs. Now, it’s more like 10%. That’s significant,” Bijaoui said.
Affordability is also a driving factor, even for luxury buyers. Even after several years of rising home prices, Miami Beach, for instance, still offers value compared to Los Angeles, Bijaoui said, especially in some lesser-known pockets.
“Baypoint is an undiscovered gem with amazing homes and values. A $20 million home there would sell for $40 million in Miami Beach. Areas like Morningside, Key Biscayne, and the south end of Coconut Grove are still opportunities. And on a price-per-square-foot basis, we’re still cheaper than L.A.,” he said.
Lower taxes have also made Las Vegas a draw for Angelenos, said Lisa Song Sutton, an agent with Engel & Völkers Las Vegas Spring Valley. Like Florida, “there is no state income tax in Nevada,” she said. “We have very low corporate taxes. And the cost of living overall is much more affordable.” More than 7,100 people moved from Los Angeles to Las Vegas in October 2022, according to Redfin.
While home prices around Las Vegas have jumped, the region still offers value for L.A. migrants, Sutton said. In Los Angeles, the median home listing price was $1.2 million in Marc, according to Realtor.com. In Summerlin―“the No. 1 destination for new arrivals,” Sutton said―the median listing price in March was $480,000, still significantly cheaper than L.A. despite a 10% price increase over the previous year, according to Realtor.com.
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“People who move here from L.A. can sell their home, buy a new build or a house on a large lot, and still keep some of their funds,” Sutton said. “And they get the amenities of a beautiful suburb, parks and walking trails, great food, and even proximity to the Strip.” Neighborhoods including Henderson, the Scotch Eighty Historic District, and the lush community known as Section 10 have also been attracting transplants, Sutton said.
The influx of Angelenos and others has pumped up the local market, she said. “It’s sticker shock for locals. Luxury used to mean anything over $750,000. Now, it’s $1 million plus. And our inventory over $5 million, which was miniscule, is steadily increasing,” she said.
The transplants are also fueling other California cities.
In Sacramento, California, where Redfin says more people are moving than any place in the country, prices are also inching up, said Chimere Washington, an agent with the Agency. Still, “we’re getting a huge number of people from Los Angeles who are both cashing out of homes there and coming here for a better quality of life,” she said.
“One of my clients from Los Angeles told me it felt like she spent 24 hours a day in her car, which meant time away from family, friends and hobbies,” Washington said. “I lived there, and I know it’s true, because I hated it.”
In March, the median home listing price in Sacramento was $488,000, trending up 2.7% year over year, according to Realtor.com. “You’re paying so much less to live here, but gaining quality of life,” Washington said. “If you’re from L.A., you sacrifice nothing by moving here. Downtown, you’ve got restaurants, coffee shops and culture. The Midtown neighborhood is a haven for foodies. And if you love nature, we’ve got great hiking trails nearby.”
Newcomers have favored Sacramento neighborhoods like Natomas, 10 minutes from downtown, high-end Carmichael and Fair Oaks, “a wealthier neighborhood just a little further out,” Washington said.
Nashville joined Sacramento last year as a top migration destination; most new arrivals have come from L.A., Redfin reports.
“The music business has always had an invisible bridge to Nashville,” said Michelle Maldonado, an agent with Compass in Nashville. “But the recent exodus tends to be driven by issues with taxes or general policy.” Lower tax rates have made Tennessee a magnet for high-earning Angelenos, she said. “Our property taxes are 1% or 1.5% in areas where I sell, with no state income tax.”
When they shop for homes, Los Angeles newcomers “want room to breathe,” Maldonado said. “Most of them have never really had land. They want the whole dream of horses and acreage. But they still want convenience and feeling like they’re near a city. The country is cute until it’s 30 miles to a grocery store.”
In March, the median listing home price in Nashville was $564,900, up 5.6% year-over-year, according to Realtor.com.
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“$1.5 million to $2.5 million is middle of the fairway for an upper-middle-class family home,” Maldonado said. “$3.5 million to $5 million is our luxury market. And uber-luxury is $6 million-$10 million. We just closed on a gorgeous $8 million property with a barn and chickens, but 10 minutes from downtown.” Upscale, Nashville-adjacent areas like Franklin, Brentwood and College Grove have been appealing to Angeleno newcomers, she said.
In Dallas, Los Angeles “migrants” have included “a lot of private-equity people, doctors and lawyers” attracted by lower taxes, said Damon Williamson, an agent with the Agency. “Everyone tells me about the Mansion Tax,” he said. “And the overall tax rate sounds insane. It averages 50% of their income between state, local and the IRS.”
Los Angeles buyers have sought out affluent Dallas neighborhoods like Preston Hollow, Highland Park, and University Park, Williamson said. “Public schools are nationally ranked, and the property taxes in the Park cities are 2% as opposed to greater Dallas’s 2.6%.”
Pools are important to L.A. buyers, “and they want some yard,” he said. But the modern style cherished in Los Angeles “we don’t really have here. If it’s modern, it has to be really nice, because people from L.A. will pick it apart.”
In March, the median listing home price in Dallas was $450,000, flat year over year. But prices vary wildly across the sprawling city, Williamson said. “Our real estate has been in a consistent bubble, and the relos have a lot to do with that,” he said, referring to relocators from Los Angeles. “It’s a great place to live.”
