The COVID-19 pandemic has ignited a migration of California millennials leaving coastal cities and setting sail for Fresno and other Valley cities.
In the hopes of striking gold on a house they could afford, Cassie Lopez and her husband exited San Francisco for Fresno. Both grew up in the Valley and graduated from Fresno State.
“I always wanted to come back, and I think my husband did too,” said Lopez. “I think if the pandemic didn’t happen, I think it would have taken the both of us a lot longer to move back, just because of our careers.”
Her family isn’t alone.
According to a recent report by Filterbuy, Fresno had the third-highest homeownership percentage increase among American cities between 2010 and 2020. And, a state report shows that while California is losing residents, Fresno continues to grow.
Pandemic Increases Demand for Homes, Open Spaces
When she first moved to the Bay Area five years ago, Lopez started out paying $1,700 for her apartment. But, with moves and rent hikes, she and her husband were paying close to $3,000 for rent before they decided to move back to the Valley.
“Rent in the Bay Area is insane,” said Lopez. “We obviously didn’t have a ton of extra money to be able to save.”
But it wasn’t until the pandemic hit that Lopez and her husband decided it was time to move.
With the closure of businesses and the transition to remote work, they worked in close quarters in a 700 square-foot apartment all day without being able to go outside.
“We started talking about where can we go that we can actually afford a house?” said Lopez. “I had a friend that was living in the Bay Area and had just moved back out to Fresno and when we came to visit her, we ended up looking at a couple of houses.”
Lopez said they quickly took action and asked their employer if they could work remotely indefinitely. When the business agreed, they decided to build the house of their dreams and happily moved in earlier this year.
Fresno’s Population Grows Through the Pandemic
In May, the state Department of Finance released a demographic report that estimated California lost more than 180,000 residents last year.
While population growth decreased or remained stagnant in much of the state, Fresno was the only one of California’s five largest cities to see a population increase in 2020, indicating a migration from expensive areas like San Francisco and Los Angeles. In addition to providing a more affordable living, the Valley offers shorter commutes and homes with larger backyards.
The report estimated that Fresno and Bakersfield increased by about 3,000 people in 2020.
“Growth remains strong in the interior counties of the Sacramento Valley, the Central Valley, and the Inland Empire, while coastal and northern counties saw population losses,” stated the report.
Percentage of Fresno Homeownership Rates Has Increased
Meanwhile, rental and home prices in Fresno have surged to meet the increased demand.
According to the U.S. Census Bureau, homeownership rates were moving gradually upward since the end of the 2008 recession. But since the pandemic, the rates have risen dramatically.
The Filterbuy report analyzed census data to determine the 70 metropolitan areas with the largest increase in homeownership rates since 2010.
Fresno’s rate rose 7.8%, trailing only Cincinnati (8.3%) and Syracuse, New York (10.3%).
The homeownership rate for Fresno through the end of 2020 was 57.1%, with a median home price of $344,130.
Millennials Positioned for Increased Homeownership
According to Filterbuy, only 40% of millennials under 35 owned a home in 2020, while 62.7% of adults 35 to 44 were homeowners. All other age groups had ownership rates of more than 70%.
However, this shift in moving to the suburbs from the big cities could soon make millennials a major force in the U.S. real estate market.
A 2021 research report found that older millennials nearing their 40s have been actively looking for single-family homes in the suburbs since the coronavirus outbreak, due in part because of the recent historical low interest rates and the rise of remote work.
The DOF projected that single-family housing is more likely to be built further inland in cities like Fresno and Bakersfield, which both had a high ratio of single-family to multi-family growth.