Slowing Exodus From State a Positive Sign for Real Estate

Last summer Dean and Marcia Arnold sold their Granada Hills home and made their move to what they thought would be paradise in Denver.

For $198,000, the Arnolds bought a 3,000-square-foot home with a swimming pool in a park-like setting. The neighborhood was pristine and the public schools were excellent. “It seemed to be the place we really wanted to raise out children,” Dean Arnold recalled.

Less than a year later, the Arnolds are moving back, and they are searching for a home in Woodland Hills. “Most people think we’re crazy,” said Dean, formerly a hospital media coordinator. “We didn’t really appreciate a lot of the things we had in Los Angeles--the diversity, culture and ability to find just about anything.”

Marcia has already moved back and is living in an apartment in Woodland Hills. “She felt a bit confined,” Dean said. “We happen to be in a white, Bible-belt pocket of Denver,” he said. “To get bagels, we have to drive to the other side of town.”

While California continues to lose population to states such as Arizona, Colorado, Nevada, Oregon and Washington, statistics indicate that the outflow is decreasing. And, a growing number of families such as the Arnolds are coming back.

While California had a net outflow of between 11,000 and 12,000 residents for each of the last three months of 1993, the net outflow to other states has been dropping dramatically in 1994, said Elizabeth Hoag, research manager for the California Department of Finance Demographic Research Unit in Sacramento. The net outflow for the first two months of this year--based on driver license records--averaged just 5,500 residents a month from California. While that’s still negative, it represents an improvement. “It could be the beginning of a trend,” Hoag said. “We’ll keep watching and see.”

How many people are coming to or leaving California--and Los Angeles particularly--has a serious impact on property values. If the exodus out of the area begins to slow considerably, this could help to buoy real estate prices in the San Fernando Valley and Ventura County. But it’s too early to tell for sure.

“I think we’ve bottomed out on the trend of people leaving Los Angeles,” said Steve Komorous, vice president of sales and marketing at King Relocation Services in Santa Fe Springs, which is an agent for United Van Lines. His company moved one family from Van Nuys to Portland, Ore., last year; now, they’re moving back to Sherman Oaks. Komorous said the family just couldn’t get used to the slower pace of life up north. “They told me it was like a time warp,” he said.

Throughout the 1970s and 1980s, Komorous recalled, most California moving companies did 70% of their interstate business moving people into Southern California, and only 30% of their business was outbound from Southern California. In the early 1990s, the percentages were completely reversed, with movers doing about 70% of their business helping people leave Southern California.

In the last several months, the percentages have begun to balance out, Komorous said. About 40% of his business is coming from inbound moves. “Things are coming back slowly,” he said. “By the end of this year I predict our ratio of inbound to outbound moves will be 50-50.”

Theresa Howe, director of relocation services at the West Los Angeles office of Jon Douglas Co., is also beginning to see an increasing number of returning Angelenos. Howe recalled one family that moved to a small town in Idaho and decided recently to return to Los Angeles. Another woman moved from Ventura County to South Carolina, Howe said. After getting bored with the South, she is in the process of moving back to Camarillo. Yet another of Howe’s clients who moved to Portland is trying to come back but still needs to get a job and a house here.

While Jon Douglas is doing more outbound than inbound business, Howe said, “I don’t think things are as grim here as people think. When most people seriously evaluate whether they should move from Los Angeles, they realize it’s not so bad here.”

“There seem to be a lot more out-of-state cars on the freeways--and they’re not all tourists,” remarked Jack Kyser,chief economist for the Economic Development Corp. of Los Angeles County and a Glendale resident. “Yes, housing may be cheaper in other states, but you have higher utility costs and you need more of a wardrobe to deal with the change of seasons,” Kyser said. California’s recent economic problems and natural disasters have prompted many people to talk about leaving, Kyser said. “But, more people talk about moving than actually do it.”