In California, the line between city life and country living has blurred in recent years. As remote work took hold and home prices surged, more buyers looked beyond the usual metro hubs, trading density for space. From 2018 to 2023, a growing number of Californians upsized to rural properties, sought vacation homes in scenic spots, or rethought urban living altogether. Meanwhile, income levels, age, and lifestyle priorities played a bigger role in shaping who moved where—and why. Comparing this shift to the post-recession years before it, it’s clear that California’s housing map is being redrawn.

2018–2019: Pre-Pandemic Homebuying Trends

buying house in California — Shutterstock

Would you like to save this?

We'll email this post to you, so you can come back to it later!

In the late 2010s, California’s economy was strong, and many people were looking to buy homes despite high prices. Urban areas like Los Angeles, San Francisco, and San Diego were very expensive. Many buyers in cities were younger professionals or families paying a premium to live near jobs.

The Affordability Challenge

Even before 2020, California had one of the lowest homeownership rates in the nation – just over half of Californians owned their home, compared to about two-thirds of households nationwide. This meant many people wanted to buy but found it challenging, especially in cities where prices had surged after the recession.

Urban vs. Rural Demand

In 2018–2019, urban housing demand was high due to job growth in tech hubs and big cities. However, rural areas and smaller cities in California also saw interest from buyers seeking relief from high prices. Regions in the Central Valley and Inland Empire offered larger homes or yards at lower prices than coastal cities.

Some families were upsizing by moving out of cramped city apartments or condos and into single-family homes in outlying areas. Others were first-time buyers who simply couldn’t afford urban real estate and looked to smaller towns. Long commutes were common for those who moved far from job centers. In the late 2010s, it wasn’t uncommon for people to drive an hour or more from home to work just to afford a house.

Home Types and Buyer Preferences

During this pre-pandemic time, many Californians buying homes were looking for more space but at a price they could manage. Upsizing was a trend for growing families and those with improving finances. Downsizing was mainly seen among some older homeowners, but many seniors in California actually stayed put if they could, because selling and buying another home (even a smaller one) in the state’s pricey market didn’t save much money.

Vacation home purchases were not especially notable in 2018–2019 – the big surge in second homes was yet to come. Overall, the late 2010s saw steady demand and rising prices statewide, with urban markets booming but early signs of migration to cheaper areas as buyers sought value.

The COVID-19 Pandemic and Remote Work (2020–2021)

The arrival of COVID-19 in 2020 dramatically shook up California’s homebuying trends. During the initial lockdowns in spring 2020, home sales briefly dipped as people stayed home and some sellers took properties off the market. But soon after, the housing market took off.

The Perfect Storm for Housing Demand

Several factors came together: mortgage interest rates dropped to historic lows, people realized they could work remotely, and families stuck at home began craving more space. By late 2020 and into 2021, California was in a housing frenzy.

Urban to Rural Shift

With remote work becoming common overnight, many buyers seized the chance to move out of crowded cities. No longer tethered to an office downtown, thousands left high-cost urban counties in search of larger, more affordable homes in suburban or rural areas.

In late 2020, a record 28.5% of Redfin.com users nationwide were looking to move to a different metropolitan area, up from about 25% a year earlier. California exemplified this trend with a huge surge of people looking to relocate from coastal, urban California to smaller cities or more rural regions.

Sacramento’s Boom

Sacramento became one of the top destinations for movers. In October 2020, Sacramento had a net inflow of people; more than 50% of home searches in Sacramento were by outsiders (mostly Bay Area residents). The number of people looking to move into Sacramento from outside the area was 75% higher in October 2020 than a year prior. The vast majority of those newcomers were from the San Francisco Bay Area, drawn by Sacramento’s lower prices and enough proximity (about 90 miles) to still visit or occasionally commute.

Vacation Areas Flourish

Even some truly rural communities saw new interest. Coastal vacation towns and mountain communities experienced a boom. For example, demand for homes in Lake Tahoe, Big Bear, and other resort-like areas spiked as remote workers realized they could live in scenic places full-time.

Nationwide data showed that by early 2021, demand for second homes (often in vacation-style locations) was up 91% from pre-pandemic levels. California, with its attractive getaway spots, was a big part of that story. Vacation home purchases soared as many white-collar workers who could afford it bought beach houses or cabins in the mountains since they no longer needed to be in a city every day.

The Upsizing Trend

A defining feature of 2020–2021 was buyers upsizing – seeking larger homes with extra rooms, a home office, or a backyard. Families who had been in apartments or small houses in the city wanted more elbow room after months of lockdown.

One nationwide study in 2022 found that because of remote work, about 5 million Americans (roughly 2.4% of the population) had already moved to a new area, and millions more were planning to do so. Many of those movers ended up much farther from their original workplaces – over one-quarter of people who moved due to remote work were now living more than four hours away from their old job location.

The “Donut Effect”

The effect was so pronounced that economists dubbed it the “donut effect” – city centers emptied out a bit, while areas a few hours’ drive away (the “donut” around the big city) saw soaring home demand and prices. For example, communities just outside the Bay Area and Los Angeles saw home values jump as buyers flooded in, even while rents and prices in the urban core leveled off or even dipped in 2020.

Urban Markets During the Pandemic

Urban real estate didn’t completely crash, but major cities like San Francisco saw a noticeable slowdown in 2020. Rents in expensive cities actually went down somewhat in 2020 as some residents moved out. Condo sales in downtown areas were softer as remote workers no longer needed to be steps from the office.

However, this urban cooling was relative – prices in cities were still very high; they just weren’t rising as fast as the red-hot rural and suburban markets. By 2021, even urban markets bounced back to an extent, as some buyers took advantage of slightly less competition in the city.

Record Sales and Competition

The pandemic homebuying frenzy led to record-high sales and intense competition. In 2021, over 442,000 homes were sold in California, the most in any year for over a decade. Many homes sold within days with multiple offers. Statewide, 2021 was called the “ultimate seller’s market.”

30-year mortgage rates hitting an all-time low of around 2.65% in early 2021 further fueled the buying spree. Importantly, investors also jumped into the market – by late 2021, investors (including large companies and house flippers) were buying nearly 1 in 5 homes in the U.S.

Demographic Shifts

The pandemic period also altered who was buying. Many millennials (in their 20s and 30s) rushed into the market, looking for their first home as priorities changed (for instance, trading city nightlife for a home office and yard).

At the same time, some older homeowners who might have downsized or moved to retirement communities held off, given the health risks of moving during COVID. This meant fewer people downsizing, which kept housing inventory tight.

The buyers who were active tended to be those with secure, remote-friendly jobs – often higher-income professionals. For example, tech workers made headlines for relocating from San Francisco to cheaper areas while keeping their Silicon Valley salaries. This influx of higher-income buyers in rural or small-town markets pushed home prices up there, narrowing the urban-rural price gap a bit.

2022–2023: Market Adjustments and Recent Trends

By 2022, the extreme frenzy of the earlier pandemic period started to calm down, and new challenges emerged. One major factor was rising mortgage interest rates. In 2022, to combat inflation, interest rates climbed quickly – the average 30-year mortgage rate went from around 3% in early 2022 to over 6% by the year’s end. This sharp rise made monthly payments much more expensive and slowed down the homebuying rush.

Cooling Migration Patterns

The urban-to-rural migration trend continued, but at a slower pace. Remote work remained popular, but by 2023 some companies began calling workers back to the office at least part-time. The peak of relocation seemed to have passed.

The share of homebuyers looking to relocate to a new metro area fell to about 23.9% in late 2023, the lowest level in a year and a half. This was slightly down from a year earlier, marking the first decline in that stat on record. Flexibility to work remotely had decreased for some, as more employers insisted on office attendance.

Still, among those who were relocating, affordable regions remained the favorites – Sacramento kept its spot as a top destination, along with out-of-state cities like Las Vegas. Rural California continued to see interest, especially from those who maintained fully remote jobs or retirees.

Rural Communities Embrace Remote Workers

By mid-2023, even local governments in some rural Northern California areas were actively trying to lure remote workers, offering perks like cash grants and help with child care to people willing to move there. This shows that the urban-to-rural shift had made a lasting impression, even if it slowed: rural communities saw an opportunity to grow by attracting people who can work from anywhere.

Market Slowdown

Sacramento California houses — Shutterstock

The number of home sales in California dropped in 2022 compared to the record 2021. There were roughly 20-25% fewer homes sold in 2022 than in 2021. Buyers faced higher borrowing costs due to the interest rate jump, which priced some out.

Also, by 2022, home prices had climbed so high (a median well into the $800,000s statewide) that many potential buyers could no longer qualify. Affordability hit a record low – only around 16% of California households could afford the median-priced house. Many first-time buyers had to put their plans on hold.

Unique Homes 28 Ways a Raw Cliff Face Becomes a Luxury Guest House (Same Backyard, 28 Different Before & After Designs) Read More →

Unique Homes 30 Ways to Live Inside a Submarine: From Dilapidated Military Submarine to Luxury Home Conversions (Before & After Pics) Read More →

In 2023, the market remained cooler, with sales at a slower pace and even some price declines in a few areas (especially expensive urban markets like San Francisco saw prices dip from their peak). Inventory of homes for sale, however, stayed low because homeowners with ultra-low mortgage rates were hesitant to sell and buy a new home at a higher rate.

Changes in Home Preferences

In 2022–2023, the rush to upsize eased a bit. Those who desperately wanted bigger homes largely made their moves in 2020–2021. By 2023, buyers were more cautious. Some who moved far out for space reconsidered if they had to start commuting a few days a week. There were anecdotes of a small return to cities, with some remote workers moving back closer to urban centers as companies demanded office time.

Downsizing – which had been subdued during COVID – started to pick up slightly as the pandemic worries waned. Older Californians who had delayed selling might have decided in 2023 it was time to move to smaller homes or out-of-state to retire. But downsizing in California remained tricky: an older couple selling a big San Jose house would get a lot of money, but finding a smaller home in California that’s much cheaper was still hard.

The End of the Vacation Home Boom

Vacation home buying, which surged in 2020–2021, also cooled by 2023. Higher interest rates and prices made second homes less attractive. By 2023, demand for vacation-home mortgages was way down compared to the boom – as housing costs hit record highs, only about 3% of all mortgage loans were for second homes, a sharp decline from the peak.

Still, those who bought vacation homes earlier weren’t selling them; they were now enjoying those properties on weekends or as remote work retreats. California’s popular vacation spots remained pricey due to limited supply.

Demographic Shifts and Challenges

One striking change during 2018–2023 was the aging of the first-time homebuyer. Nationally, and likely similarly in California, the typical first-time buyer in 2022 was 36 years old – an all-time high – up from age 33 just one year before. This jump illustrates how difficult the market had become for young buyers; many needed extra years (and help from family or savings) to purchase their first home.

In 2022, first-time buyers made up only 26% of homebuyers, down from historical norms. The median household incomes of California homebuyers also rose over this period. Nationwide data in 2022 showed a typical homebuyer income around $107,000, and California’s would be even higher given its prices.

The bottom line is that buying a home in California from 2018–2023 increasingly required being older and earning a high income. Many younger Californians found themselves renting longer or seeking homes in farther-flung areas (or even in other states).

Comparing 2018–2023 with 2008–2017

To really understand these trends, it helps to contrast them with the previous decade (2008–2017). The differences are eye-opening, as California’s housing market went from the depths of a crash to a pandemic-era boom.

Impact of Economic Cycles

The 2008–2017 period began with the housing market crash. The Great Recession (around 2008–2011) saw home prices in California plummet and sales volumes drop sharply. Many urban and rural areas alike suffered foreclosures.

By contrast, 2018–2023 started with a strong economy and then saw a sudden pandemic shock. But instead of a crash, home prices surged during the pandemic. Where 2008–2011 was a time of fear and forced selling, 2020–2021 became a time of frenzied buying.

Homebuying Volume

After the crash, homebuying in 2008–2012 was slow. 2010 was a moment when first-time buyers were relatively active (helped by low prices and tax credits), making up about half of buyers. As the recovery took hold in 2013–2017, sales picked up steadily, but they never reached the crazy pace of 2021.

In contrast, 2021’s sales of ~442k homes were the highest in many years, surpassing anything in the prior decade. Then 2022–2023 saw a dip, whereas the earlier decade saw a more gradual climb. Essentially, 2008–2017 looked like a U-shaped recovery, while 2018–2023 was a rollercoaster: a steady climb, a spike, and a partial drop-off.

Urban vs. Rural Preferences

In the earlier decade, remote work was rare. Most people had to live within commuting distance of their jobs. This meant urban areas and suburbs near cities were consistently in demand. Rural parts of California (far from job centers) had lower demand, except for retirement or vacation spots.

From 2018–2023, this script flipped during the pandemic: remote work allowed a wave of urban-to-rural migration that had no precedent in 2008–2017. But in 2020–2021, they moved because suddenly location didn’t matter as much for work. The result was a more pronounced blending of urban and rural demand. By 2023, many rural California communities had more new transplants (often working remotely) than at any time in the prior decade.

Home Types and Buyer Behavior

After the 2008 crash, downsizing was common out of necessity – some families who lost homes moved into smaller rentals, and some older folks sold and moved to cheaper states. Upsizing was limited in the early 2010s because even if prices were low, credit was tight.

Yet, nothing in 2008–2017 compares to the vacation-home boom of 2020–2021. Overall, the mix of home types purchased skewed larger and more dispersed in 2018–2023 (lots of single-family homes on the outskirts), whereas 2008–2017 had more recovery in established markets and a focus on affordability.

Buyer Demographics

In the aftermath of 2008, house prices were lower, so more young buyers could enter the market (hence the 50% first-time buyer share in 2010). As the decade progressed, millennials started entering their 30s and looking for homes, but they faced high prices by the late 2010s.

In 2018–2023, millennials became the dominant buying group by numbers, but they were generally older millennials by the time they could actually buy. The median first-time buyer age rising to 36 by 2022 illustrates that it took longer to achieve homeownership.

Also, incomes of buyers in the 2020s were higher out of necessity. California’s buyer pool in 2008–2017 included more middle-class families who managed to buy when prices dipped or with effort during the recovery. In 2018–2023, especially post-2020, the buyer pool skewed toward dual-income professional households and others with high-paying jobs.

Major Influences

The prior decade’s biggest event was the Great Recession, which meant credit crunch, foreclosures, and then years of recovery. The 2018–2023 period was influenced by a different set of shocks and policies: a global pandemic, emergency low interest rates, then sudden high inflation and rising rates, plus stimulus checks and remote work tech.

The result was a very different dynamic: demand-side pressure in the latter period (lots of people eager to buy) versus supply-side glut then slow pickup in the earlier period. In both periods, California struggled with housing supply – building new homes didn’t keep up with population and job growth.

Conclusion

From 2018 through 2023, California experienced profound shifts in homebuying trends between urban and rural areas. Remote work and the COVID-19 pandemic sparked an exodus of some homebuyers from big cities to more rural locales, as many sought larger homes, yards, and a lower cost of living.

Buyers upsized their homes in record numbers during 2020–2021, and vacation home purchases also jumped as people realized they could work from a beach or mountain cabin. Demographically, buyers in recent years have trended older and wealthier, a reflection of how expensive the state’s housing has become.

By 2022–2023, the frenzy cooled due to higher interest rates, and the urban-rural migration slowed somewhat – yet the changes in buyer behavior have left a lasting imprint. Rural areas retained new residents and continued to attract remote workers, while urban markets adapted to a hybrid-work reality.

Compared to 2008–2017, the differences are stark. The earlier decade was defined by a housing crash and gradual recovery centered mostly on traditional patterns (staying near jobs, slow upsizing). The 2018–2023 period, however, broke the mold with a pandemic-driven shake-up that saw the lines between urban and rural demand blur more than ever.

As of 2023, California’s homebuying landscape is still evolving. Urban areas remain expensive and desirable for many, but rural and suburban communities now claim a larger share of the state’s homeowners than before. The past few years have underscored that major events (a recession or a pandemic) can rapidly alter where and how people want to live. Going forward, the balance between urban appeal and rural respite in California will likely continue to shift in interesting ways, influenced by the economy, technology, and people’s changing preferences.