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For the Redfin users who were looking beyond the Bay Area, referred to as “origin leavers,” the biggest draws were other metropolitan areas within the state: Sacramento topped the list, at 20.4%, followed by Los Angeles at 12.5%. This also confirms a trend seen in USPS data from 2020, which showed that despite widespread migration, only a small fraction of Bay Area residents had left the state.

The Redfin data looks at search history on the site for the first quarter of 2022 for the San Jose metro area, which Redfin defines as including San Jose, San Francisco and Oakland.

The numbers for Sacramento make sense, Redfin deputy chief economist Taylor Marr said: California’s capital area offers more affordable homes, but people who move there can “keep ties to the Bay Area” and “come in once a month for meetings” if needed.

The third-most-searched destination outside the Bay Area was Seattle at 5%. Washington’s most populous city has seen the “ripple effects” of people from the Bay Area moving there, Marr said: Local residents have been “priced out at record levels.”

Meanwhile, Seattle looks the way the Bay Area did about eight years ago, he said.

The Bay Area “saw most inbound migration back in 2014,” when many people, both domestically and internationally, were moving here for tech jobs, Marr said. The tide began turning in 2015, he said, as cities including Seattle, Denver, Austin and Portland became more attractive for tech workers.

Outmigration has since accelerated, while the number of people moving to California has decreased, Marr said.

The pandemic and federal policies accelerated those trends, as reflected in California Department of Finance population estimates based on U.S. census data released early this month.

While foreign immigration typically has offset population losses from people leaving California, the number of immigrants coming here has dropped due to the pandemic and federal policies, The Chronicle reported this month. The data showed a net gain of 43,300 last year, compared with an average of 140,000 before COVID.

Meanwhile, state officials said, birth rates have slowed while the aging of the Baby Boomer generation has accelerated the death rate, accompanied by a surge in deaths from COVID-19 — all contributing to California’s population decline to 39,185,605 from a peak of 39,538,223 in early 2020. The state’s population last grew by about 0.2%, or 87,494 people, in 2019, according to census data.

The Bay Area’s sky-high home prices, however, have remained seemingly impervious to the changes. Even with mortgage rates going up, home buying remains competitive. While rents dropped in parts of the Bay Area during the pandemic, they remained among the highest in the nation and have rebounded in major cities, including San Francisco.

Rising inflation is making an area already notorious for its high cost of living even more unaffordable. And a recent report declared the San Francisco and San Jose housing markets among the world’s most unaffordable.

But even so, a Redfin analysis of U.S. migration hot spots combining migration and inflation data in the first quarter of 2022 shows that while Phoenix is the second-most-popular place for home buyers to move, it has the highest inflation rate of 10.9% of metros included in the analysis. San Francisco, on the other hand, was the metro where the most people left, and had an inflation rate half that of Phoenix at 5.2%.

“A homebuyer would still save a lot of money by moving from San Francisco to Phoenix if they kept the same job and the same salary,” Marr said in the analysis, but noted that the discount is less than it was two years ago and many people are doing the same thing as prices for housing, goods and services continues to go up in these more “affordable” areas.

“There may come a point where it won’t make financial sense to move from coastal California to Phoenix or Atlanta,” he said — though that point is likely still years away, since popular migration destinations are adding more new homes than other places in the U.S.

Within California, San Diego was the third-most-searched metro area for Bay Area users looking outside the region, at 4.5%. The San Diego area has become one of California’s hottest housing markets in the past few years, with home values rising and inventory decreasing.

San Diego was followed by Fresno and Salinas, each with 2.9% of the Bay Area Redfin user share of searches outside their region. California’s Central Valley was a hot real estate market at the height of the pandemic as Bay Area residents were attracted to more space and affordable housing there.

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Article source: https://therealdeal.com/sanfrancisco/2022/05/06/sobrato-buys-into-soma-with-record-setting-office-deal-for-sf/

So in January, the 81-year-old finalized a deal to sell her Point Reyes home at a steep discount to the Community Land Trust of West Marin, better known as CLAM, which buys property off the high-priced private market and converts it into affordable homes. In Loeb’s case, it’s a deal that will allow her to live the rest of her life in the house with no monthly payment, then entrust CLAM to “pay it forward” to others in need of lower-cost housing.

“This is my community,” said Loeb, who has lived in West Marin for 46 years. “I want to do what I can.”

For many California families, passing down a home that’s mostly or completely paid off is the biggest opportunity in a generation to build wealth. Loeb said her children supported the plan to forgo some of those financial gains, and she saw it as a chance to settle her mind in her golden years while leaving something behind for others struggling to crack into an increasingly out-of-reach housing market.

The $550,000 sale of her 1-acre property — home to three one-bedroom bungalows ringed by mountains and cypress trees, which Zillow estimates could be worth more than $1 million — is the first success for a new Age-in-Place initiative at CLAM. It’s also an example of the increasingly sophisticated ways that Bay Area land trusts and community groups are trying to ease the housing crisis, from equity-oriented Oakland homeownership programs to wrestling entire apartment buildings back from Silicon Valley investors.

In Point Reyes, population 895, the average home is worth around $1.6 million, up 22% from just one year ago, according to a Zillow estimate. But similar to other Bay Area tourist hot spots, the average local household earns a disproportionately low $74,000 a year, census data shows, fueling high demand for scarce affordable housing.

“It’s impossible to keep up,” said Ruth Lopez, program manager for CLAM, which sees demand far beyond the 18 income-restricted rental units it currently manages. “We have 200 people on the wait list.”

As far as Loeb knows, the house that she lives in was originally built as a chicken coop about 150 years ago. Another owner stuccoed over the walls and made it a utilitarian homestead with low ceilings and overhead plumbing. Loeb and her then-husband bought the surrounding 2-acre property with a friend in the 1980s, then kept 1 acre and their house when the friend later sold and moved to New Mexico.

Today, the airy main house that Loeb’s contractor ex-husband renovated over 18 years has blond wood floors, ample skylights and walls full of art made by Loeb and her son. The lofted bedroom feels like a tree house with its vaulted wood ceiling and a balcony perched over the irises, apple trees and tomato plants growing below.

“We wanted the outside to be inside,” Loeb said. “That was the whole point of coming to California.”

House rich, cash poor

Even on the rural edge of Marin County, today’s California isn’t the 1960s dream that Loeb was chasing when she moved here from New York at age 20. In Point Reyes, where her son used to get chased home from school by ranchers’ kids for looking like “a hippie,” Loeb now avoids the throngs of tourists who pack the small downtown on weekends. She worries about former school colleagues and other workers being forced into long commutes.

For Lopez, whose three kids attended the Papermill Creek Children’s Corner where Loeb taught, rising housing costs also make it harder for housing nonprofits like CLAM to keep a foothold. That’s why, a few years ago, she and her colleagues started looking at places like Colorado for creative ideas to buy new properties with prices rising.

“The average age here is like 65,” Lopez said. “We thought there might be some seniors who are kind of house rich and cash poor, and that might be our best strategy to acquire properties and help seniors stay in their homes.”

It was spring 2021 when Loeb started seriously considering selling her home to CLAM. Under a deal known as a “retained life estate,” she plans to live in the home for the rest of her life with no mortgage, keep earning income from two small rentals on the property, then task CLAM with converting her home to affordable housing after her death.

The two sides agreed that, in exchange for the lower sale price, the land trust would also cover tax bills and major repairs. This spring, the whole property was tented and fumigated to get rid of pests, and a new roof was installed.

Loeb said her daughter, who lives nearby, was supportive of the decision, and her son, an artist living in Memphis, told her to “just do it.” The land trust also required family to sign off.

“We don’t want anyone coming back saying, ‘This is elder abuse,’” Lopez said.

‘My legacy’

The fine print of retained life estate deals like the one Loeb opted for vary, but they aren’t new. Other types of charities and community institutions — food banks, universities, churches — have long offered donors the option of passing on valuable properties this way. After a homeowner transfers the deed to a nonprofit for an agreed-upon price, effectively securing “future ownership,” Lopez said, the owner gets to keep living there while gaining the tax benefits of a charitable gift.

Homeowners seriously worried about losing their homes may look to such arrangements instead of risky loans or reverse mortgages, and the process is designed to avoid postmortem red tape like probate court. In exchange, the land trust or nonprofit gains a property that would otherwise be too expensive to buy.

Other Bay Area affordable housing groups, including the Sonoma Land Trust, also offer to help facilitate retained life estates. In nearby cities, housing nonprofits confronting their own forms of gentrification are experimenting with different approaches, several focused on extending homeownership and estate planning to non-white families who stand to disproportionately benefit because of pervasive racial wealth gaps.

The Oakland Community Land Trust acquires single-family homes — including one famously occupied by activist group Moms 4 Housing — to be sold at discounted rates or leased to own. In the working-class Peninsula enclave of North Fair Oaks, the nun who leads the Catholic nonprofit St. Francis Center has amassed a multimillion-dollar affordable housing portfolio by leveraging private donations to buy buildings back from real estate speculators.

Across the country, philanthropy consultants such as Chase Magnuson have seen rising demand to tap into would-be donor dollars locked in real estate, sometimes through wonky-sounding trusts or through traditional wills. The trick, he said, is making sure all sides are prepared to deal with potentially costly hurdles like maintenance, insurance and other financial or family turmoil.

“They need to have professional financial help,” said Magnuson, president of Houston’s Real Estate for Charities, “so that they don’t do something wonderful and then run out of money.”

In Point Reyes, CLAM agreed to pay Loeb $300,000 up front for the house, then two subsequent payments totaling $250,000. The discounted purchase was financed by a mix of private donations, county affordable housing dollars and funding from the Marin Community Foundation, county records show.

Lopez said CLAM, which has an annual budget of around $850,000 and owns several million dollars’ worth of property, is still evaluating long-term options for Loeb’s home. Whenever the day comes that she no longer lives there, the land trust may sell the bungalows and lease the land at an affordable rate, Lopez said, or rent them all out below market value.

That all sounds just fine to Loeb.

“I don’t see how this town can survive without affordable housing,” she said. “And I mean, that’s my legacy, right?”

In fact, out of the nearly 100 housing markets in eight countries examined in the report, just one remained “affordable” when measuring home prices in relation to income: Pittsburgh.

The finding that the East Coast city now stands alone in the “affordable” category in the 2022 Demographia International Housing Affordability report was “surprising,” according to Wendell Cox, a senior fellow at the Urban Reform Institute in Houston and the Frontier Centre for Public Policy in Canada, which jointly issued the report.

Last year, three other cities were also rated affordable, all in the U.S. but none on the West Coast: Rochester and Buffalo, N.Y., and St. Louis, Mo.

‘Unprecedented’ price growth

But the COVID-19 pandemic fueled a rapid shift in home markets, causing prices to grow at “unprecedented” rates, according to the report.

“Housing affordability in virtually all markets has worsened in the last couple of years as a result of the pandemic related ‘demand shock,’” Cox said. “This huge increase in demand relative to supply has occurred as households have sought larger houses and yards.”

The report, based on data from the third quarter of 2021, used the price-to-income ratio, or median house price divided by the gross median household income, to rate middle-income housing affordability. The lower the ratio, referred to as the “median multiple,” the more affordable a market is.

Middle-income housing affordability was separated into four categories:

• Affordable (median multiple of 3 and lower)

• Moderately unaffordable (3.1 to 4)

• Seriously unaffordable (4.1 to 5)

• Severely unaffordable (5.1 and higher)

Among the 92 metropolitan markets examined in Australia, Canada, China, Ireland, New Zealand, Singapore, the United Kingdom and the United States, only Pittsburgh remained in the affordable range with a median multiple of 2.7 – and was therefore ranked the No. 1 most affordable market both in the U.S. and internationally.

At the other end of the spectrum, San Francisco ranked 86th with a median multiple of 11.8, while San Jose was in 89th place internationally with a median multiple of 12.6, surpassed in unaffordability only by Vancouver, B.C.; Sydney; and Hong Kong.

Among the 56 U.S. markets examined, San Francisco was 54th and San Jose was 56th least affordable, separated by Honolulu. The report defined the San Francisco market as encompassing San Francisco, Marin, Alameda, Contra Costa and San Mateo counties, while the San Jose market included San Jose, Santa Clara and San Benito counties.

Though prices vary within those metropolitan areas, at least seven figures is common: The median sale prices in the cities of San Jose and San Francisco are $1.45 million and $1.53 million, respectively. Realtor.com reports the median listing price for both cities at $1.3 million.

The other figure determining affordability, median household income, is $119,136 in San Francisco and $117,324 in San Jose, according to the U.S. Census.

By contrast, in Pittsburgh, the median household income is only about half those in the Bay Area cities, at $61,969, according to the U.S. census.

But what makes the city “affordable” is its dramatically lower home prices. In Pittsburgh, the median home sale price on Redfin is $231,700, while the median listing home price on Realtor.com is $230,000.

Even after accounting for pandemic demand shock, Pittsburgh reigns in terms of housing affordability because “these less unaffordable markets have preserved a competitive supply of land,” Cox said.

That contrasts with markets such as San Francisco and San Jose, which have strict land-use rules, he said, especially “urban containment regulation,” which according to the report aims to curb “sprawl” by restricting building beyond set growth boundaries.

Planners’ expectations that increased housing density within urban boundaries would maintain affordability did not materialize — instead, affordability “has deteriorated substantially” in cities including San Francisco, Seattle, Toronto and Sydney, the report said.

“In the last pre-pandemic year, all of the markets we covered with severely unaffordable housing … had strong urban containment strategies,” Cox said. “Before land-use regulation became much stronger, there was little difference between housing affordability in California and the rest of the nation.”

Gap largest in California

California now has the biggest share of “severely unaffordable” markets in the U.S., including four of the country’s five highest cost markets relative to incomes, according to the report.

In addition to San Jose and San Francisco, Los Angeles ranked 84th internationally and 53rd in the nation with a median multiple of 10.7. San Diego was close behind at 82nd internationally and 52nd in the U.S., with a median multiple of 10.1, while Riverside-San Bernardino was 76th internationally and 49th in the U.S. with a 7.4 median multiple.

“California is a wonderful place to live,” said Cox. “Yet, the housing affordability-driven cost of living crisis is making it impossible for many middle-income households to afford a decent middle-income standard of living. That will not change without significant regulatory reform, which does not seem likely.”

Cox added that as major markets such as ones in California continue to become more unaffordable, inequality, poverty and overcrowding seem likely to worsen, and more people will need to seek subsidized housing.

That in turn could mean that fewer middle-income households and corporate headquarters will come to California, and as more people work remotely, they’ll continue to seek more affordable places to live out of state, Cox said.

Recent figures from the state Department of Finance showed that California’s overall population decreased by 0.3% in 2021, only the second drop since data collection began in 1900. Experts said out-migration to other states and a steep drop in international immigration due to the pandemic were major factors in the decline.

The housing report found that two other California markets were slightly more affordable than Bay Area metros, but still ranked low both worldwide and nationally: Sacramento had a median multiple of 6.7 and ranked 69th for affordability internationally and 44th nationally, while Fresno was 66th in the world and 42nd nationally with a median multiple of 6.5.

Majority of U.S. households priced out

Housing affordability is “critical” for the surge in remote work, the report noted, but it cited data from the National Association of Home Builders showing that almost 70% of households in the U.S. can’t afford the median-priced house.

Although only one market met the definition of “affordable” in the report, Cox said the criteria remain valid.

“There is broad agreement among economists that much of the problem is an overly prescriptive regulatory system,” he said. “In my view, the answer is not to ‘move the goal posts,’ but rather to make policy adjustments that reduce the huge increases in inequality that the housing market has created. Indeed, differences in housing affordability largely define inequality between metropolitan areas.”

Researchers offered one potential note of encouragement: The highest-cost housing markets, such as San Francisco and San Jose, could see prices flatten or decrease as people move to more affordable areas.

“We hope that the losses sustained during the pandemic will be quickly reversed and the increasing inequality attributable to higher house prices will become a thing of the past,” the report said.

So in January, the 81-year-old finalized a deal to sell her Point Reyes home at a steep discount to the Community Land Trust of West Marin, better known as CLAM, which buys property off the high-priced private market and converts it into affordable homes. In Loeb’s case, it’s a deal that will allow her to live the rest of her life in the house with no monthly payment, then entrust CLAM to pay it forward to others in need of lower-cost housing.

“This is my community,” said Loeb, who has lived in West Marin for 46 years. “I want to do what I can.”

For many California families, passing down a home that’s mostly or completely paid off is the biggest opportunity in a generation to build wealth. Loeb said her children supported the plan to forgo some of those financial gains, and she saw it as a chance to settle her mind in her golden years while leaving something behind for others struggling to crack into an increasingly out-of-reach housing market.

The $550,000 sale of her one-acre property — home to three one-bedroom bungalows ringed by mountains and cypress trees, which Zillow estimates could be worth more than $1 million — is the first success for a new Age-In-Place initiative at CLAM. It’s also an example of the increasingly sophisticated ways that Bay Area land trusts and community groups are trying to ease the housing crisis, from equity-oriented Oakland homeownership programs to wrestling entire apartment buildings back from Silicon Valley investors.

In Point Reyes, population 895, the average home is worth around $1.6 million, up 22% from just one year ago, according to a Zillow estimate. But similar to other Bay Area tourist hot spots, the average local household earns a disproportionately low $74,000 a year, Census data show, fueling high demand for scarce affordable housing.

“It’s impossible to keep up,” said Ruth Lopez, program manager for CLAM, which sees demand far beyond the 18 income-restricted rental units it currently manages. “We have 200 people on the waitlist.”

As far as Loeb knows, the house that she lives in was originally built as a chicken coop about 150 years ago. Another owner stuccoed over the walls and made it a utilitarian homestead with low ceilings and overhead plumbing. Loeb and her then-husband bought the surrounding two-acre property with a friend in the 1980s, then kept one acre and their house when the friend later sold and moved to New Mexico.

Today, the airy main house that Loeb’s contractor ex renovated over 18 years has blonde wood floors, ample skylights and walls full of art made by Loeb and her son. The lofted bedroom feels like a treehouse with its vaulted wood ceiling and a balcony perched over the irises, apple trees and tomato plants growing below.

“We wanted the outside to be inside,” Loeb said. “That was the whole point of coming to California.”

House rich, cash poor

Even on the rural edge of Marin County, today’s California isn’t the 1960s dream that Loeb was chasing when she moved here from New York at age 20. In Point Reyes, where her son used to get chased home from school by ranchers’ kids for looking like “a hippie,” Loeb now avoids the throngs of tourists who pack the small downtown on weekends. She worries about former school colleagues and other workers being forced into long commutes.

For Lopez, whose three kids attended the Papermill Creek Children’s Corner where Loeb taught, rising housing costs also make it harder for housing nonprofits like CLAM to keep a foothold. That’s why, a few years ago, she and her colleagues started looking at places like Colorado for creative ideas to buy new properties with prices rising.

“The average age here is like 65,” Lopez said. “We thought there might be some seniors who are kind of house-rich and cash-poor, and that might be our best strategy to acquire properties and help seniors stay in their homes.”

It was spring 2021 when Loeb started seriously considering selling her home to CLAM. Under a deal known as a “retained life estate,” she plans to live in the home for the rest of her life with no mortgage, keep earning income from two small rentals on the property, then task CLAM with converting her home to affordable housing after her death.

The two sides agreed that, in exchange for the lower sale price, the land trust would also cover tax bills and major repairs. This spring, the whole property was tented and fumigated to get rid of pests, and a new roof was installed.

Loeb said her daughter who lives nearby was supportive of the decision, and her son, an artist living in Memphis, told her to, “Just do it.” The land trust also required family sign off.

“We don’t want anyone coming back saying, ‘This is elder abuse,’” Lopez said.

‘My legacy’

The fine print of retained life estate deals like the one Loeb opted for vary, but they aren’t new. Other types of charities and community institutions — food banks, universities, churches — have long offered donors the option of passing on valuable properties this way. After a homeowner transfers the deed to a nonprofit for an agreed-upon price, effectively securing “future ownership,” Lopez said, the owner gets to keep living there while gaining the tax benefits of a charitable gift.

Homeowners seriously worried about losing their homes may look to such arrangements instead of risky loans or reverse mortgages, and the process is designed to avoid postmortem red tape like probate court. In exchange, the land trust or nonprofit gains a property that would otherwise be too expensive to buy.

Other Bay Area affordable housing groups, including the Sonoma Land Trust, also offer to help facilitate retained life estates. In nearby cities, housing nonprofits confronting their own forms of gentrification are experimenting with different approaches, several focused on extending homeownership and estate planning to non-white families who stand to disproportionately benefit due to pervasive racial wealth gaps.

The Oakland Community Land Trust acquires single-family homes — including one famously occupied by activist group Moms 4 Housing — to be sold at discounted rates or leased to own. In the working-class Peninsula enclave of North Fair Oaks, the nun who leads Catholic nonprofit the St. Francis Center has amassed a multimillion-dollar affordable housing portfolio by leveraging private donations to buy buildings back from real estate speculators.

Across the country, philanthropy consultants like Chase Magnuson have seen rising demand to tap into would-be-donor dollars locked in real estate, sometimes through wonky-sounding trusts or through traditional wills. The trick, he said, is making sure all sides are prepared to deal with potentially costly hurdles like maintenance, insurance and other financial or family turmoil.

“They need to have professional financial help,” said Magnuson, president of Houston’s Real Estate for Charities, “so that they don’t do something wonderful and then run out of money.”

In Point Reyes, CLAM agreed to pay Loeb $300,000 up front for the house, then two subsequent payments totaling $250,000. The discounted purchase was financed by a mix of private donations, county affordable housing dollars and funding from the Marin Community Foundation, county records show.

Lopez said CLAM, which has an annual budget of around $850,000 and owns several million dollars worth of property, is still evaluating long-term options for Loeb’s home. Whenever the day comes that she no longer lives there, the land trust may sell the bungalows and lease the land at an affordable rate, Lopez said, or rent them all out below market value.

That all sounds just fine to Loeb.

“I don’t see how this town can survive without affordable housing,” she said. “And I mean, that’s my legacy, right?”

Lauren Hepler (she/her) is a San Francisco Chronicle staff writer. Email: lauren.hepler@sfchronicle.com Twitter: @LAHepler