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Leaving California? What You Need to Know

July 24, 2020 | Claire Tak Claire Tak

With taxes going up and the cost of living rising, more California residents are hitting the road. If you’re leaving California, here are some tips.

California is experiencing a rise in its residents packing up and relocating to other states. A recent Pew Research Center survey revealed that 3 percent of Americans permanently moved because of coronavirus. 

Despite this virus-related shift, the California exodus has been ongoing. In 2018, more than 690,000 Californians moved out and the year before that more residents left (200,000) than moved in. 

Californians have set their sights on more affordable states such as Texas, Arizona, and Nevada. 

What’s causing people to leave Cali? 

It’s no secret that California has one of the most competitive housing markets in the nation. One reason why people were leaving had to do with cost and affordability for homes. 

Joy D., a Sundae customer, was one of the thousands who left California because she was simply priced out. “We lived in Vista, California for 35 years but it became increasingly difficult to meet the expenses and upkeep of our home. We are actually living here [in Nebraska] where in California we were merely existing.” 

According to one survey, some Californians have left because of lucrative incentive programs in neighboring states and for political reasons. According to data from Sundae customers, some Californians are choosing to leave because they are nearing retirement. 

Other reasons point to high taxes–state sales tax rate is at almost 9 percent and state income taxes are among the highest in the nation as of 2020. The state wasn’t facetiously dubbed “Taxifornia” for nothing. 

 Then there’s the price of gas–California has the nation’s highest gas (61 cents per gallon) and diesel taxes (81 cents per gallon)

Read more: California’s Most Taxed Cities

Where are Californians going?

The Census Bureau showed that from 2017 to 2018 many Californians left the state and settled down west of the Mississippi River. 

Here are the top states and the number of Californians that moved to them in that time period:

  • Texas: 86,164 
  • Arizona: 68,516
  • Washington: 55,467
  • Nevada 50,707
  • Oregon 43,058

3 things to think about before you sell your home and move

Perhaps the facts and figures above resonate with you and you’re ready to ditch the sunny skies of Cali for some place that will be easier on your finances. 

If you’re thinking about selling your home and moving, here are three things to consider.  

1. Check to see what other homes in your area are selling for

Because of the unpredictability of what the market will look like in the next year, sellers are being choosy and may be holding off on selling. Interest rates are still low, but so are sales. The market has shifted to a seller’s market.  

Before you start your plan to move, determine how much you want to list your home for. Find out how much equity you have in your home and what other similar homes in your area are selling for. 

Related: How to Know if It’s a Seller’s Market

2. Assess the condition of your home 

Is your home outdated or is it ready for a buyer to immediately move in? In other words, does it need minor repairs such as new kitchen cabinets and appliances or are there glaring foundational fixes that need to be made? 

If your house has an outdated kitchen or bathroom and only needs cosmetic upgrades, it could be worth it for you to do this before selling. Sundae Customer Advisor Amit Patel explains, “Most buyers are looking for turnkey homes. Typically, homes that need major repairs will spend a lot more time on the market, even though this is a seller’s market. A property that is updated and modern may spend 30 to 60 days on the market, whereas a property that needs updates is going to spend more time than that and likely priced lower.” 

Read more: Should I Fix My House or Sell As Is?

Consider a cash buyer if your house needs large renovations

If your house needs major repairs such as a new roof or new plumbing, it may present too large of an undertaking for your timeline and budget. In this case, you may want to consider selling off market to a cash buyer.  

In his experience, Patel says many sellers who are selling fixer uppers tend to miscalculate when it comes to pricing their homes competitively. “Sellers think they can discount their property by $10,000 to $15,000, when in reality, the cost for a buyer to renovate would likely be way more.” 

Think about what makes the most sense for how you want to sell your home, based on your personal situation and the current condition of your home. 

See also: Selling a House As Is

3. Selling to Sundae

If your home needs extensive repairs and you don’t have the money or time to fix them, you may consider a cash buyer like Sundae. Learn more about the process of selling your home to Sundae.

Going this route may help you avoid costly renovations and fixes, cleanings, showing your property, and a potentially drawn out sales and closing process. Sundae buys hundreds of homes each year, in cash. Also, if time is of the essence, you can close in as little as 10 days. 

Related: How to Decide if Sundae Is Right for You

Timing is important

Keep in mind that homes in California tend to take around 50 days before selling, but because of coronavirus and its impact (i.e., delays in the process because of the shift in contactless buying and selling), it may stay on the market longer. This means it may affect the costs associated with mortgage, insurance, taxes, and maintenance of the house while it is waiting to be sold. 

Set realistic timelines for selling, especially if you’re considering fixing it up before selling. Whether you decide to sell to a cash buyer or go the traditional route, make sure you thoroughly research and understand your options.

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