“Sell My House Fast” Businesses In California are fueled by millennials and corporate relocation, but they may be going different directions. While businesses relocate from California to locations where there are no corporate or personal income tax, the data shows that Millennials are looking beyond the high profile job titles in large cities to own homes and raise families in cities like Lincoln Nebraska and De Moines Iowa.
There are two themes that are extremely interesting about real estate. One is its giant role in the financial crisis. The other is the drastic decline in homeownership after the crisis. But where are the new home buyers of today coming from? You will be surprised to know that not only are Millennials buying more houses, but they are doing it in areas of the country you wouldn’t have guessed. We found an article by Realtor.com, written by Lance Lambert (“ForgetSF, Goodbye NYC!”) that gives some insight into where Millennials are moving.
The result? The rent-versus-own analysis no longer overwhelmingly favors becoming a tenant, as it did for a few years after housing prices had taken off. Now, rents have caught up with buying, even for entry level properties.
• Rising rates: Hard as it might be to recall, as recently as the 1990s, the 30 year fixed-rate mortgage ranged from a little less than 7 percent to as much as 10 percent. The Federal Reserve made its intentions clear last year that it was in the process of raising rates back to normal levels. That likely suggests an ongoing, gradual increase in the cost of borrowing to purchase a home. This creates an incentive to buy sooner rather than later.
• Millennials: The idea that many were averse to homeownership peaked a few years ago. But this was never a very credible argument. This would assume that this population group was in some way fundamentally different from the generations that had come before. Even in a bad economy, 74 percent of millennials still very much associate home ownership with stability. As the economy has improved, we are seeing more millennials move out of their parents basements and the rates of home ownership begin to climb.
But What Does This Mean To Businesses?
While Millennials are becoming new homeowners in Lincoln Nebraska and De Moines Iowa, that doesn’t necessarily mean that they are following the businesses moving out of CA. Some of the states Californians are fleeing to offer a life without corporate or personal income taxes and home costs in the low six figures. Texas, for instance, has boomed, becoming one of the fastest-growing states in the nation. It’s now home to 867,000 new residents from California, who arrived between 2010 and 2016.
A recent McKinsey Global Institute study, for example, found that a third of metro-area renters in California can’t afford what they pay, a sobering sign of the lack of new affordable housing being built. And an alarming subject since millennials have surpassed baby boomers to become America’s largest living generation
The cost and compliance burdens of California’s taxes and regulations fall disproportionately on smaller companies, which are less able to afford the teams of attorneys and accountants that mega-corporations can employ.
To no one’s surprise, Texas was the main beneficiary of California divestment events during each year of the study.
Following Texas, the top destinations for “fleeing” California businesses were Nevada, Arizona, Colorado, Washington, Oregon, North Carolina, Florida, Georgia, and Virginia. What does this suggest when the rising number of millennial homeowners are now buying homes in Lincoln NE, De Moines IA, Appleton WI, and Provo UT and the aging baby boomers are aging out of the work force?
According to a report by business relocation expert Joseph Vranich, from 2008 through 2015, at least 1,687 California companies pulled up stakes and moved elsewhere. And those are only the reported ones, Vranich says.
He cites a rule of thumb among business site-selection experts that five companies leave for each one that actually gets reported in the press. So it’s probable that as many as 10,000 companies have left in recent years.
Why are they leaving? Despite relentless, Chamber of Commerce-style efforts by state and local governments, California is now one of the worst places to do business in America.
And what does this mean for homeowners who need to relocate with their jobs, or find new jobs in other cities or states? They find themselves in a situation, saying “I need to sell my California house fast”
“In California, costs to run a business are higher than in other states and nations — largely due to the state’s tax and regulatory policies — and the business climate shows little chance of improving,” states Vranich, in his 2016 report on business departures.
While there are so many things beyond our control when it comes to people and politics, one thing for sure is that businesses who are entering into new budget and strategy planning sessions may want to explore the things that are important to millennials and business’s just might find a new talent pool in places like De Moines, Ia, Provo UT and Lafayette, LA.
Need to sell your house fast in California (and securely)?
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