Thursday, November 18, 2004

Costs may clear out California's coastal areas

SACRAMENTO (AP) — A fourth of all Californians are thinking about moving — either out of state or just to another town — to bring down their housing costs, a survey shows.

High rents and rising home prices have residents, particularly younger ones, rethinking the value of the mountain views and ocean shores they say they treasure. Of the respondents under 35, for example, nearly half say they might relocate to somewhere cheaper.

The study, released Thursday by the Public Policy Institute of California, found that even many homeowners now see little upside to rising prices that have greatly inflated their property values, with many believing they couldn't afford to buy another house in their own neighborhoods. Sixty percent of the respondents worry their children won't be able to buy homes in their part of the state.

Instead of being optimistic about life in California, a new generation "coming into the owning stages of their lives ... are exactly the people who are talking about moving elsewhere, " said the institute's Mark Baldassare, author of the statewide study. "You're talking about your workforce. You're talking about your future."

The survey, the most comprehensive of its kind in years in California, reveals the moving-out sentiment is highest in coastal areas and many are acting on it. Since 1995, according to the institute, more than 350,000 residents have moved from the coast to the less expensive Central Valley.

California's traditionally high mortgage costs are also further discouraging renters, the survey reports. Only one in five who hope eventually to buy a house are confident they can do it.

The results dovetail with findings this month by the California Association of Realtors showing that only 19% of the state's households can afford the state's median-priced home of $465,000. That's a 5% drop from a year ago. Nationally, the median-priced home — where half cost more and half cost less — was $186,600 in September.

The survey of 2,502 people was taken from Oct. 21 to Nov. 1 and has a margin of sampling error of plus or minus 2 percentage points.

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