Toyota is Leaving the South Bay…

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Last month Toyota announced their plans of moving their headquarters from Torrance, California to Plano, Texas. Since then there has been a lot of buzz and concern for what this move will do to our South Bay real estate market. A lot of friends, family, and clients have approached me with what my thoughts and opinion are so I’ve decided to share some of them with you.

First, let’s lay out the facts:
-3,000 Toyota jobs will be transferring out of Torrance
-Back in 2006 when Nissan made a similar move to Tennessee only 42% of employees made the move
-Plans of completion of new campus will not take place until late 2016 or early 2017
-Toyota’s campus is approximately 2 million square feet of property

Things that I have heard (which may or may not be true):
-100 employees have already made the move
-Toyota is giving all of their employees incentives to move to Plano including an all expenses paid trip to visit the area, finances to help with the move which include closing costs for sales of homes and moving costs, and increase in salary
-Honda is also considering a similar move

What I think this will do to our real estate market:
Taking all things into consideration, my personal opinion is that we may see a little bit of an effect on our housing market but nothing too dramatic.  If half the employees make a move to Plano we are only looking at 1,500 moves and only a percentage of those Toyota employees live locally in the South Bay area. The 2 million square foot lot will most likely be replaced by either another large company or multiple small businesses which could potentially bring in new buyers from out of the area. Also, because Toyota will not make its final move for another two years the market could make another shift depending on other external factors like interest rates, loan restrictions, and the overall stability of local and national economy which may allow for more buyers to purchase. Prices have been increasing rapidly because of the high demand and low supply of homes but with this move we may see prices leveling out and possibly declining.
Of major concern is what this move may do to our local businesses. Many neighborhood businesses thrive off of the thousands of Toyota employees before, during, and after business hours. This may have a domino effect and if local businesses are affected, their employees will be too.  This could result in more moves or short sales and foreclosures.  Also, IF Honda decides to move out of the state, I would predict that we will see more of a major impact on our local housing market and businesses. However, I am hopeful that the impact will be minimal and that Honda will not follow in Toyota’s footsteps. I am also optimistic that buyers’ needs will be fulfilled with the new listings that may come up on the market. I am a South Bay lover and I honestly believe there will always be a high demand to buy and live here. With that said, I will be keeping my eyes and ears open for any information that may help my clients, friends, and family make decisions on their home purchases or sales. If you have any insight, questions, or comments please feel free to contact me directly or leave a message on my page.

Have a happy Weber Weekly Wednesday!

 

*Facts and statistics quoted from the LA times. Full article can be found here:
http://www.latimes.com/business/autos/la-fi-toyota-move-20140429-story.html

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