The U.S. Census announced last week that the estimated population of San Francisco County grew by more than 8,000 people between July 2016 and July 2017, on top of smaller population surges in surrounding counties. Which is surprising, especially given the steady stream of news lately about people planning to leave the Bay Area.
- In the first week of March, real estate site Redfin reported that San Francisco has the highest “outflow”—net number of potential homebuyers browsing ads in other cities—of any U.S. metro area, a trend that has remained consistent ever since Redfin began issuing its quarterly migration reports in 2017.
- The same week, the Chicago-based PR firm Edelman reported that of 500 Bay Area residents polled in a phone survey, 49 percent said they are “considering moving away from California because of the high cost of living.”
- In February, San Francisco Chronicle reported that a University of Michigan professor surveyed the price of U-Hauls and concluded that soaring demand in San Jose and surrounding counties had agitated prices and created a shortage.
- And finally, much has been made of prototypical Silicon Valley venture capitalist Peter Thiel’s decision to leave the Bay Area, declaring the tech boom “over” and grousing about how much money he spends subsidizing real estate costs for companies he invests in.
And yet, the population continues to grow, albeit at a smaller rate than in other post-2010 years. What’s the deal?
Well, since the census figures are from July of 2017, it’s technically possible that a huge exodus has occurred in the past eight months and it’s not on the books yet.
Also consider what Curbed SF noted about all of these trends at the time: Redfin users shopping for homes in other cities aren’t necessarily actually moving; there’s no way to know if people who told Edelman that they are “considering” moving are actually going to do it, or when; the fact that Bay Area residents rent a lot of U-Hauls doesn’t tell us whether they’re moving out of the region or within it; and Peter Thiel seems to generally like to complain about anything.
More than anything, these trends tell us about public sentiment in the Bay Area, which is an important consideration but doesn’t necessarily translate to action.
On Monday, Paragon Real Estate Group economic Patrick Carlisle examined the census figures more closely and found that since 2015, San Francisco’s net domestic migration—the number of U.S. residents moving into SF versus those leaving—has indeed declined.
In 2016, domestic migration was down 1,334 people, almost exactly equivalent to the gain in the previous year. In 2017, the loss more than doubled to 2,689. So it appears a great many of those people saying they want to leave the city really did pick up and go.
But the population increased both years anyway, because the number of immigrants coming into San Francisco makes up the difference:
More people are NOT leaving San Francisco or the Bay Area than arriving. When you tally both domestic migration in and out (to and from other places in the U.S.), and foreign migration, more people are arriving than leaving.
It is true than in the past two years, domestic net migration has shifted to a net loss, but that deficit is still overcome by the large positive in foreign immigration. Is the shift in domestic migration worrisome? Yes, if it continues to grow. But it is not cataclysmic in its current proportions.
In fact, net foreign migration has been responsible for most of San Francisco’s recent growth.
As Carlisle notes, it’s not insignificant that domestic migration is in decline, just like it’s not unimportant that so many people gripe about the cost of living in the Bay Area when asked. But it’s not the end of the world either.