Sunbelt States Losing Population

In a major reversal of trends, for the first time many of the most populated Sunbelt states are losing population as a result of the real estate crash and financial strain.

Sedona, Arizona

It’s the first time in decades that many of the country’s finest Sunbelt states, including Florida, Nevada and Arizona have experienced a drop in residents. But the nation’s biggest state, California with nearly 38-million residents is experiencing population growth as a result of a higher birth rate, according to the California Department of Finance.

California’s population grew less than one percent between July, 2008 and July, 2009 according to official population estimates released by the State Department of Finance. The figure represents 353,000 new residents during the fiscal year, despite the fact that many Californians are leaving the state for jobs and a lower cost of living.

The increase is attributed to higher birth rates. The rise in new births is the primary source of growth in California in the last year with 547,000. However, net migration contributed just slightly more than 37,000 new residents. The state gained over 179,000 new foreign immigrants during the year, and lost an estimated 142,000 people to other states.

While California has continued to experience population growth even though it has one of the highest foreclosure rates in the country, Florida has seen its population shrink for the first time in 63 years.

The reversal was triggered by two years of back-to-back hurricanes, higher property taxes and more expensive home insurance rates. The migration of Florida residents to other states, including heavily to North Carolina and Tennessee is attributed to lower housing prices.

Carmel, California

The recession triggered an increase in migration of seniors from Florida, who are highly dependent on fixed income retirement. Losses in the stock market and housing wealth have also contributed to moving. Many in the tourist and construction industries, Florida’s two biggest employment segments have lost jobs, forcing moves. Others are seeking more affordable life-styles with lower tax burdens.

Some 142,000 California residents moved to other states during the fiscal year to escape higher state taxes, congestion and weakening government services. Tens of thousands of Californians are moving to east coast states, a reversal of trends that dates back to World War II.

In hard-hit Nevada, where Las Vegas suffers from the highest foreclosure rate in the nation Nevada state officials say the state lost 27,677 people in the last fiscal year. Growing job losses in construction and gaming contribute to the trend. The last time the Silver State saw a loss in population was during the 1910-1920 decade.

Strong evidence is also developing to show population losses in much of Arizona. At the height of the real estate boom Phoenix had the highest median housing price in the nation, but with the bust Phoenix is also suffering through one of the more painful busts in the U.S. Foreclosures are projected to exceed 2009 levels this year, delaying any real sort of economic recovery in housing for longer.

Utility hook-ups have slowed. Elementary and high school enrollments in many areas are dropping, indications that fewer people are living in Phoenix and Tucson. The migration of residents, facing economic hardship moving to other areas of the country out of Sunbelt states is evident as more families move in with friends and relatives.