[Dialogue] More and more Americans are moving to get away from overheated housing markets.

[Harry Wainwright]

Colleagues, is this the end and a new beginning? Peace, Harry 
  _____  


'Take this house and shove it'
More and more Americans are moving to get away from overheated housing
markets.
December 6, 2005: 11:06 AM EST 
By Les Christie, CNNMoney.com staff writer

NEW YORK(CNNMoney.com) - Many residents of high-priced housing markets
around the country are cashing out and moving to more affordable areas. 

In Massachusetts, a quarter of the people in the state said they would leave
if they had the opportunity, according to a poll by MassINC, a non-profit
public policy think tank. They would join some 170,000 Bay Staters who left
for other parts of the United States between 2000 and 2004.

The No. 1 reason cited by those who want to leave: The high cost of living.
And the No. 1 area needing major improvement: Housing affordability.

On the other side of America, Hawaii faces a similar mindset -- two out of
every five residents say they have considered leaving the islands because of
the cost of housing, according to a poll co-sponsored by the Hawaii Business
Roundtable and Pacific Resource Partnership.

There are other places that have been affected.

California suffers a net loss of about 100,000 residents a year to other
states, according to Economy.com. In recent years, many have cashed out
their rapidly appreciated homes and moved to Arizona, Washington, and
Oregon.

But now that prices have climbed in those states as well, the latest trend
is that Californians are turning to the Midwest, where spacious houses are
available for half of the cost of similar space in Los Angeles.

"It makes increasing sense if you can buy more house and still live in a
good area," says Conrad Egan, president and CEO of the Center for Housing
Policy, a non-profit group that seeks to make sense of the nation's housing
policy.

Compelling math

On Long Island, the once bucolic suburb but now heavily developed region
next to New York City, about 70 percent of residents are at least somewhat
concerned that high housing costs will drive their families from the region.

And this is not a far-off issue -- 45 percent said it was at least somewhat
likely that they would move out during the next five years.

There are two factors at work, according to Carrie Meek Gallagher, project
director of the Long Island Index, which published the findings.

The first is that younger Long Islanders aged 18 to 34 are unable to afford
decent homes.

"Many families spend more than half their income on housing, "says Egan at
the Center for Housing Policy.

The second is that older residents who already own increasingly valuable
property find they can sell their present homes, buy in less expensive
locales, and have big nest eggs left over.

For them, the numbers add up like this: A Long Island couple with income of
$100,000 wants to move to Daytona Beach. Florida as well as Georgia and the
Carolinas are prime destinations for Long Islanders.

According to CNNMoney.com's cost of living calculator, they would need only
about $68,000 a year there to live as they're accustomed to. (Try different
scenarios with the tool calculator above.)

And selling their house and buying a new one down South would produce a big
fat dividend. The American Homebuilders Association reports that a
comparable home in the Deltona-Daytona Beach area, for example, costs about
$194,000 compared with $434,000 in Long Island's Nassau County.

Younger Long Islanders, says Gallagher, often find that they may have to
take a slight pay cut when they move to the Sun Belt, "but they more than
make up for it by being able to buy a brand new house for half the price it
would cost on Long Island."

The trend has already taken root and seems to be accelerating.

"There was a big jump, from 62 percent to 70 percent, in one year of the
18-to-34 age group who think they are likely to leave within the next five
years," according to Gallagher.

Eroding affordability

On the other coast, an exodus of Californians leaving for Nevada has helped
transform the housing market in Las Vegas into one of the hottest in the
country.

But there are signs that Vegas is about played out. The median house there
has leaped to $283,000 and the ratio to median income is now about 4.8,
nearly as high as Long Island's ratio of about five to one.

The jump in Vegas has caused many Californians to think elsewhere.

For example, California money pouring into Arizona has helped make Phoenix
the hottest house market in the country, with home values ballooning 55
percent over the last 12 months, according to the latest statistics from
Office of Federal Housing Enterprise Oversight, which regulates Fannie Mae
and Freddie Mac.

It's even been reported that Las Vegans are starting to pull up stakes for
the cheaper markets such as Phoenix, Tucson, and Chandler, all in Arizona.

Now, what odds could you have gotten betting on that a few years ago?

 

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