Why Hollywood is falling out of love with Los Angeles

News.com.au

14 hours ago

Los Angeles has always been the home of movie stars and blockbuster shoots, but now, it seems many people are running for the hills — and we don't mean Beverly Hills.
Once the epicentre of the worldwide film industry, La-La Land now seems more 'like a Rust Belt crater,' according to a Vulture.
'It's so grim, like a sad company town where the mill is closing,' one anonymous executive told the publication.
Today, only about one in five American films and shows are filmed in Los Angeles, Realtor reports
There are many reasons — lingering effects from the COVID-19 pandemic, wildfires, worker strikes, the decline of movie theatres, and healthy tax incentives offered by other states.
This means that the majority of films are now being produced outside of Los Angeles — and the industry's workers are following.
Many big box-office stars are also no longer tethered to the area, either.
Celebrities such as Mark Wahlberg, Chris Evans, Matthew McConaughey, Glenn Powell, and Rachel McAdams have all quit California.
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But without movies and without celebrities, what does that mean for the overall Los Angeles – area real estate market?
In June 2025, 38.1 per cent of Los Angeles – based home shoppers on Realtor looked at homes in other states.
The top out-of-state markets for these shoppers were Las Vegas (2.8 per cent of views), Phoenix (1.7 per cent), Dallas (1.05 per cent), Portland, OR (0.98 per cent), and Lake Havasu, AZ (0.9 per cent).
'We're witnessing a significant shift in both celebrity migration patterns and the ripple effect on the Los Angeles housing market,' says Southern California real estate agent TJ Convertino.
'The slowdown in consistent film production locally — paired with more shoots happening in places like Georgia, Texas, Vegas, and Canada — has reduced the 'gotta-be-here' urgency that once defined L.A. homebuying, particularly in the luxury tier.'
Movies are moving where things are less taxing
Once filled with buzzing back lots, the Hollywood studio scene these days more closely resembles a ghost town.
And one of the big reasons is that tax incentives to film elsewhere are better.
Canada, one of the first countries to roll out film production tax credits in the '90s, has captured much of the film and TV market, with the United Kingdom and Australia following suit.
Tax incentives for film productions stateside in places such as Atlanta, New Orleans, Las Vegas, and Albuquerque, New Mexico, have also succeeded in bringing more projects to those states, helping boost the local economies.
And their efforts to lure productions away from Hollywood are only intensifying.
Las Vegas — now the home of many celebs, including Wahlberg and Dean Cain — has been actively working on becoming a hub for film production.
Wahlberg has also supported the construction of a huge studio complex there.
Kevin Costner has also built a $US100 million ($A152 million) film studio and soundstage in Southern Utah, and Zachary Levi is currently trying to raise $US40 million ($A61 million) in capital to help build a $100 million $US100 million ($A152 million) studio near Austin, Texas.
In other words, celebs are also looking to put more work right in their new backyards.
Though Governor Gavin Newsom does recognise California has been losing entertainment industry business that otherwise would have stayed in the state — and he's working on a $US7.5 billion ($A11.4 billion) federal tax incentive to boost production of films in the United States — the question is, are these efforts too late to help Hollywood?
'Even though Los Angeles is known for having the most highly skilled crews in the world, it's still called the film and TV business with the key word being 'business,'' Victor Currie, a real estate agent with the Unvert Group at Douglas Elliman of California, told Realtor.
'If a studio can save millions of dollars by shooting in Vancouver or Atlanta, they're going to do it.'
The Hollywood exodus is affecting where industry employees live
While high-profile celebrities leaving Hollywood make news, a less talked-about effect of the industry shift is that the 'supporting cast of characters' is also more likely to leave town.
'The big stars get the attention when they buy property in another state, but the biggest impact is with the below-the-line crews, technicians, and support people, that are being hurt the most as less projects film locally,' Mr Currie said.
'There's a lot more work for production crew people in cities like Atlanta, New Orleans, and Albuquerque these days, and the cost of living is a lot lower.'
In other words, not only are celebs relocating away from Hollywood, but so, too, are the people behind the scenes.
'Los Angeles is one of the most expensive metros in the U.S. when it comes to housing', Realtor.com senior economic research analyst Hannah Jones said.
'In fact, a median earner in L.A. would have to spend their entire income on housing to afford a median-priced home.'
The median list price in Los Angeles was $US1.2 million ($A1.8 million) in May, compared with just $US420,000 ($A641,000) in Atlanta, US$325,000 ($A496,000) in New Orleans, and $US549,000 ($A837,000) in Nashville.
'Homeownership is simply not feasible for the typical household in Los Angeles, which could push some to leave in search of more affordability', Ms Jones said.
'L.A. also suffers from high living costs aside from housing, which keeps pressure on middle-income households, even if they have found a way to afford renting/owning in the metro'.
'Though movers may be giving up the desirable cultural, lifestyle, and career advantages of L.A., moving away may be increasingly attractive as affordability fails to make substantial progress.'
Cara Ameer, a bicoastal agent with Coldwell Banker who is licensed in California and Florida, worked with an assistant director in the film industry who moved from the Los Angeles area to Florida in 2020.
He moved from a very small home in Burbank to a brand-new, spacious home in an upscale gated neighbourhood that was part of a masterplanned community with pools, parks, and recreational opportunities, Ms Ameer told Realtor.
'Although he had moved farther away from the hub of where production work was located in Southern California, he was prepared to simply get on more planes for jobs and also geographically aligning himself with production opportunities that were located on the East Coast and the Southeast — such as Atlanta — because of the move,' Ms Ameer said.
'He wasn't too concerned because he flew out of town for a lot of jobs as it was when he was based in Southern California, and the move afforded a quality-of-life change, no state income tax, as well as the opportunity to be near family.'
Taxes, insurance, and quality of life are also driving celeb relocation
In addition to more film and TV productions moving outside of Hollywood, other factors are influencing the current celebrity relocation as well.
'The ULA tax — dubbed the 'mansion tax' — has chilled the high-end market,' Mr Convertino said.
'He is referring to the policy that adds a 4 per cent tax on the total transaction for property sales over $5 million ($A7.6 million) and a 5.5 per cent rate for sales above $10 million ($A15.2 million) in various areas of Los Angeles.
'Sellers are either pricing below the $US5 million ($A7.6 million) threshold to avoid it or pulling listings entirely, with some celebrities opting out of LA altogether to sidestep the tax.'
Also, owing to the recent fires (and even before they ravaged Altadena and the Pacific Palisades), the challenges of acquiring home insurance in the area have had a huge impact on the real estate market as well.
'New fire maps are coming out for the state in late July, and many areas that weren't initially deemed to be in a high or very high fire zone now are, which has created even more insurance challenges,' Ms Ameer said.
'The cost of obtaining insurance is expensive and may be a deal breaker for many.'
Another impetus for moving is that many celebrities are seeking more 'normalcy' in less prominent locales.
'It's less about finding more privacy elsewhere and more about escaping the constant exposure to L.A.'s paparazzi culture, aerial drones, and even neighbours with camera phones — celebs feel watched at all times,' Mr Convertino said.
'In other states, especially those with gated properties on large plots of land, they can blend in more, live without curtains drawn 24/7, and avoid the scrutiny that has become a part of LA life.'
Finally, a lower cost of living is incentivising relocation activity.
'Several high net worth clients — yes, even those in the public eye — have expressed frustration with the cost-to-benefit ratio of living in Los Angeles,' Mr Convertino said.
'It's not just about whether they can afford it — it's whether they should, with many questioning why they're paying top dollar for homes in areas that now offer them less privacy, more congestion, and a diminishing sense of community.'
Is there still room for a Hollywood happy ending?
'The L.A. market still has global appeal, but between crime headlines, political shifts, and lifestyle changes post-pandemic, it's no longer the obvious 'forever home' for creatives,' Mr Convertino said.
'Many are diversifying — keeping a place in L.A. but planting real roots elsewhere.'
With that in mind, many celebrities still maintain some sort of abode in Southern California.
However, the new trend is that it's not their primary residence.
'With streaming platforms increasingly filming out of state, we're seeing second homes become primary residences,' Mr Convertino added.
'Atlanta suburbs, Austin, and even Vancouver have seen a surge in luxury property sales driven in part by money from the entertainment industry.'
While out-migration has been a recent phenomenon in California, Ms Ameer believes that every metropolitan area goes through cycles of exodus as well as return.
'Los Angeles/Southern California is resilient, and the optimal weather along with the diversity of the beach to the mountains and all in between make it hard to resist,' Ms Ameer said.
'Plus, since it's a slower market and there's never been a better time to buy in Southern California than there is now.'