The Market Tectonics of California Real Estate

Mr. Dehner works in finance and Ms. Dehner works part-time in e-commerce. They briefly considered moving to Southern California, but decided after last year’s ferocious wildfire season that it wasn’t worth the risk. Life in Texas, she said, will offer a lower cost of living, and hence, more peace of mind.

“Finances won’t be a driving factor in every decision we make,” she said. “It gives us a cushion to enjoy life.

In April 2021, the median sales price for a single-family home in San Francisco County was $1,800,000. In Sacramento, 100 miles northeast, where home prices have jumped 22.5 percent since last year, it was $490,000.

“In the last 10 months the market has caught fire, and migration is absolutely up,” said Ryan Lundquist, a real estate appraiser in Sacramento who also maintains a blog about the Central Valley housing market. “We have increased migration from the Bay Area, and there are also so many local buyers on the prowl for whom Covid has been the catalyst to make that decision to live in outlying areas.”

While San Francisco and Los Angeles both saw their population dip in 2020, California Policy Lab found “no evidence of a pronounced exodus from the state,” adding that “the pandemic has not so much propelled people out of California as it has shifted them around within it.”

It has also shifted where those people do business.

Ryan Swehla, co-founder of the Modesto, Calif.-based commercial real estate firm Graceada Partners, has seen a swift uptick in low-rise office leases throughout the pandemic. California’s Central Valley — which includes the state capital, Sacramento, as well as cities like Fresno and Stockton, has been steadily growing for decades, and now, he said, is benefiting from a brain drain of tech workers fed up with the congestion and inflated prices of Silicon Valley.

The gears were already in motion before the pandemic — Zennify, a computer-software company, tripled its Sacramento work force in 2019; Intel’s campus in nearby Folsom was established in 1984. But now that many Bay Area tech companies have embraced remote or hybrid work, tech workers are increasingly looking to cities like Sacramento, which is 90 minutes by car from San Francisco, and local tech companies are moving in a bid to attract them.