How Long Do Californians Stay in Their Homes Before Selling?

Key Highlights:

• California’s 30 largest cities posted significant differences in homeowner tenure in 2022: Salinas residents spent 9.3 years in their home before selling it, while owners in Elk Grove who changed homes did so after just 2.3 years, on average.
• Boasting the second- and third-longest tenures, Fremont and San Diego nevertheless trailed Salinas: Here, residents stayed put around 6 years before becoming antsy.
• Of the top 5 largest cities, San Diego residents spent the most time in a home (6 years), while San Francisco and San Jose owners averaged around 5.5 years. Los Angeles owners spent just under 5 years in one home, while residents in Fresno, California’s fifth largest city, moved after just 3.9 years.
• Perhaps unsurprisingly, owners spent more time in a home the larger it was. What is surprising, though, is that owners of homes between 500 and 1,000 square feet spent almost as much time living in the same home as owners of big mansions did: 5 years.
• Compared to 2019 (the last year before the pandemic brought about the avalanche of change that people are still trying to adapt to) homeowner tenure has increased: The time Californians spent in a home before selling went from 4.4 years in 2019 to a median of 4.8 years in 2022.
• Approach: Homeowner tenure is defined as the time (in years) between the most recent sale date of a property and the previous date it changed owners. For this study, we used sold data from our sister company PropertyShark, looking at home sales in the 30 largest cities in California in 2019, 2020, 2021 and 2022. We took into consideration all properties with at least 2 sales dates, excluding properties that didn’t change owners at least once.

In the real estate industry, there’s the so-called five-year rule, which states that homebuyers should wait at least five years before selling and moving, to avoid losing money. That’s because transaction costs like the agent’s commission, inspection-related fees and also the closing and moving costs typically add up to 15% to a home’s sale price. Assuming a 3% to 5% annual home value appreciation, it could take around five years to cover those transaction costs and get a better deal.

But, as it appears, owners in several California cities aren’t worried about that: With average tenures between 2.3 and 4.9 years, homes in 12 of the 30 largest cities switched owners much faster than recommended. What’s more, even if these numbers seem very small, Californians were noticeably faster to sell four years ago: In 2019, owners in 17 of the 30 most populous cities sold their homes after less than five years.

Homeowner Median Tenure in California’s 30 Largest Cities is 4.8 Years

Californians live longest in homes that are either 5,000+ square feet or 500-1,000 square feet.

In California’s 30 largest cities, the median tenure was 4.8 years, which was just less than the recommended timeframe of 5 years. This amount of time would theoretically increase a buyer’s chances of recouping transaction costs, although there are, of course, no guarantees.

That said, there seems to be quite a difference between condo owners and single-family homebuyers: Condo owners spent more time in their home before selling (5.3 years) compared to single-family owners (4.7 years). Whether they enjoy the practicality of the condo lifestyle or they value the affordability, condo owners in the Golden State’s largest urban hubs were a bit more attached to their homes than single-family residents.

This trend also became obvious when analyzing homeowner tenure based on home size. According to the data, Californians love the extremes: With median tenures of 5.0 and 5.1 years, it was either the largest homes or the second-smallest homes that kept owners in place the most. Homes of 5,000 square feet and above, as well as homes between 500 and 1,000 square feet, boasted the longest tenures. Conversely, homes between 1,001 and 4,999 square feet had median tenures of 4.8 and 4.9 years.

When it comes to new homes and homes that have been on the market for a while, the clear winner was… the middle-aged home: With average tenures of 5.5 and 5.4 years, homes between 11 and 20 years old, and also homes between 21 and 50 years old were the most appealing to Californians. The least appealing homes? New ones. Owners of homes less than 5 years old tended to spend only around two years in them before moving.

This could be because new homes are usually starter homes: As such, they’re extremely attractive to first-time buyers, who are willing to sacrifice location and even square footage for a lower price. And, because a starter home is usually more affordable, it allows new homeowners to get a foot on the property ladder.

But, if there’s a strong reason to upgrade — like a growing family or a new job — Californians will do so in a heartbeat. And, given the accelerated home price appreciation of the last few years, changing homes might just have been easier than ever before: Many owners may have been eager to cash in equity and use the funds elsewhere.

However, it’s possible that many Californians are selling after a short period of time and possibly not buying another home in the same state. According to an analysis by the Public Policy Institute of California (PPIC), the state has been losing residents since 2001:

“Since 2010, about 7.5 million people moved from California to other states, while only 5.8 million people moved to California from other parts of the country. According to Department of Finance estimates, the state has lost residents to other states every year since 2001.

 

[…] Most people who move across state lines do so for housing, job, or family reasons. Since 2015, among interstate movers who cite housing as the primary reason, California has experienced net losses of 413,000 adults (according to the Current Population Survey). Net losses among those who cite jobs as the primary reason totaled 333,000 and among those who cite family 239.000.  The PPIC Statewide Survey finds that 37% of Californians have seriously considered leaving the state because of housing costs.“

Elk Grove & Sacramento Owners Can’t Sit Still

Homes in these two cities change owners the fastest.

Although all homes in this ranking had tenures of less than five years, Sacramento and Elk Grove owners were in a league of their own. With average tenures of 2.3 and 2.4 years, this meant that existing homes in these cities changed hands after just a little more than two years.

This could reflect a “buy-it-and-instantly-regret-it” pandemic trend: Given that these homes were all sold in 2022 and residents only spent around two years living there, many of these properties could have been bought during the hectic, claustrophobic early days of the COVID-19 pandemic.

Of course, the short tenure could also reflect lifestyle changes, like outgrowing a home or moving for a new job or to a better location. In any case, the fact is that Sacramento and its satellite Elk Grove really stood out due to their (very) short homeowner tenure.

Meanwhile, at 3.9 years, Fresno had the third-lowest home tenure in the state. And, among the cities with the shortest tenures, Los Angeles, Irvine, Huntington Beach, Santa Ana and Anaheim had another thing in common: These were the cities that defied the general price trends. According to a Bankrate analysis, prices here continued to go up despite the fact that most markets started cooling off in 2022:

“Overall, homes in California are slightly less expensive than they were one year ago — but only very slightly. […] This does not hold true across all areas of the state. For example, Fresno, Los Angeles and Orange County saw equally slight increases year-over-year, while the wine-country regions of Napa and Sonoma saw more significant increases.”

Like elsewhere in California, this could be due to the demographic shift that the state has been undergoing: For the last 20 years, low- and middle-income residents have been fleeing the city, making room for high-earning professionals who follow the demanding, high-paying jobs that the state is touting. High housing and living costs are driving out many Californians. The same analysis from the Public Policy Institute of California emphasized this growing phenomenon:

“People who move to California are different from those who move out. In general, those who move here are more likely to be working age, to be employed, and to earn high wages—and are less likely to be in poverty—than those who move away.”

Salinas Boasts Longest Housing Tenure, Followed by Fremont & San Diego

San Jose and San Francisco are also among the larger cities in California where homeowners are not in a hurry to sell.

At the other end of the spectrum, the average period between homes changing owners in Salinas was a much longer 9.3 years. Fremont and San Diego rounded out the podium, although the average tenure in these cities was a lower 6.1 and 6.0 years, respectively. However, compared to the cities from the previous list, it really was obvious that owners here were less inclined to up and leave.

Given the high housing prices in many of the cities in the top 10 and the cost of living in these areas, it would appear that higher-earning owners are indeed favoring certain urban hubs and are taking their time when it comes to changing homes. Again according to the PPIC analysis:

“People who move to California have higher incomes than those who move away. Some have argued that the opposite is taking place—that California’s relatively progressive and high personal income tax rates drive out higher-income residents. But the fact is that California has been losing lower- and middle-income residents to other states for some time while continuing to gain higher-income adults.”

Aside from Salinas, Fremont and San Diego, which are some of the most expensive cities in California, living in cities like Santa Rosa, Oxnard, San Jose and San Francisco comes with a similarly high price tag. The cost of living in these cities is not only among the highest in the state, but also in the entire nation.

That said, it’s the myriad of job prospects and business opportunities, combined with top education possibilities and lifestyle options that truly make these cities irresistible for many people. Those who want and can afford to live and move here rarely want to opt for other places.

Compared to 2019, Owners Tend to Spend More Time in a Home Before Selling

Although Californians are pretty restless at the moment, owners in most cities spent even less time in a home in 2019.

Less than five years seems like a very short amount of time to spend in a home before selling it. But, four years ago, tenure was even shorter: Owners in California’s 30 largest cities who sold their homes in 2019 stayed in them just 4.4 years. Then, the median climbed to 4.5 in 2020, and later to 4.8 in 2021, where it remained in 2022, as well.

Once again, Salinas, stood out: Not only did the city have the longest tenure in 2022, but it did so in 2019, as well. What's more, it also posted the most significant increase — compared to 2019, homeowners here spent 2.7 more years in their home before selling.

The second-largest increase in homeowner tenure was recorded in Santa Rosa, followed by Oakland. Here, residents spent 1.4 and 1.1 more years in their homes in 2022 than they did prior to the pandemic.

Previously, homeowners in just 13 cities spent five years or more in a home before selling. In 2022, that number grew: Owners in 18 cities spent at least the recommended five years living in the same home.

One factor contributing to homeowners staying put a little longer could be the growing instability brought on by the pandemic, and the financial uncertainty that ensued. Although many people were looking for larger homes and trying to buy as fast as possible, many more were likely more risk-averse. Instead of selling and trying to find something better, many homeowners decided to wait and not add more uncertainty and stress to their lives.

At the other end of the spectrum, homeowner tenure actually decreased in 10 of California's largest cities: Riverside took the top spot after shaving two full years off its median tenure. It was followed by Moreno Valley, Oceanside and Corona, where tenure decreased between 1.0 and 1.5 years.

Six more cities recorded drops in median tenure, all of which were less than one year: Chula Vista, San Diego, Lancaster, Bakersfield, Fresno and Huntington Beach.

Of course, it could be that the pandemic had a totally opposite effect here. Emboldened by the newfound freedom brought on by remote work, many may have decided to sell and relocate. Another possibility could be that high inflation and the rising costs of living pushed many out of their comfort zone and, consequently, out of their homes.

To that end, a growing number of Californians have been saying that housing affordability is a worsening issue, which might force them to find more affordable places. According to a PPIC survey:

"A record-high 46 percent of Californians say the cost of their housing makes them and their family seriously consider moving out of the part of California where they currently live, with most saying they would move outside the state. Renters (53%) are more likely than homeowners (39%)—and younger Californians are more likely than older ones—to say that they have seriously considered moving out of the part of California where they currently live."

No two homeowners are the same and their reasons for selling and moving may vary greatly even if they had been living in the same neighborhood. California may indeed be plagued by affordability issues and high living costs, but it also has plenty to offer when it comes to financial and professional opportunities. That's why many people will continue to choose other states, while many others will continue to be attracted by the myriad advantages the Golden State boasts.

Methodology

• For this study, we took into consideration the 30 most populous cities in California. We excluded four San Bernardino cities (San Bernardino, Fontana, Ontario and Rancho Cucamonga) and one Stanislaus city (Modesto) because of transaction data unavailability. We added the next 5 cities by population.
• Working with proprietary data from our sister company PropertyShark, we looked at all the home sales from 2022, 2021, 2020 and 2019 that also had a previous sale date. This means we excluded all properties that didn't have at least two reported transactions.
• The number of transactions included in our analysis was as follows: in 2022 there were almost 203,000 transactions recorded, in 2021 there were 157,000, in 2020 there were 127,000 and in 2019 there were 126,000 sales.
• We calculated the homeowner tenure as the difference (in years) between the most recent sale date (2022) and the previous sale date.

Fair use and redistribution

We encourage and freely grant you permission to reuse, host, or repost the story in this article. When doing so, we only ask that you kindly attribute the authors by linking to Point2Homes.com or this page so that your readers can learn more about this project, the research behind it and its methodology.

For an overview of the real estate market in some of the areas mentioned in this study and other large California cities, visit the links below:

Fontana Real Estate
Ontario Real Estate
Rancho Cucamonga Real Estate
Pomona Real Estate
Escondido Real Estate
Torrance Real Estate
Roseville Real Estate
Pasadena Real Estate
Temecula Real Estate