Mid-sized cities in California are outperforming traditional markets and coastal luxury hotspots in 2026.
Flippers and developers need to pivot fast to ensure they don’t miss a trick.
It’s all a part of natural migration that is taking place within the Golden State.
Capital efficiency, affordability pressure and job decentralization including the rise in work from home jobs are all combining to shift lucrative flipping margins inland.
Among the mid-sized cities attracting buyers and offering flippers and developers numerous opportunities are:
- Sacramento
- Fresno
- Bakersfield
- Inland Empire
- Modesto
Here’s why it’s happening and how you can cash in on the inland migration.
Population shifts
California has been losing people at a significant rate.
Around 1.64 million people left the state and were not replaced between 2020-24.
While the departure rate is slowing, it didn’t stop another 239,575 packing their bags in 2024.
But mid-sized cities are bucking the trend.
That’s because not everyone is leaving the state.
Many are merely fleeing to more comfortable and affordable mid-sized cities.
Riverside County experienced the largest growth of any county in California (65,000) between 2020-25.
San Joaquin Valley and the Sacramento region were close behind the Inland Empire and are expected to continue to pull families away from the coast.
Conversely, Los Angeles County saw the biggest decline (146,000) during the same period, leading the drain away from the big cities.
Future projections indicate inland regions will continue to grow faster than coastal areas over the coming decades.
The Inland Empire cities and Sacramento region are expected to experience some of the highest growth rates in the state.
Price compression on the California coast
The initial trigger for the stampede toward mid-sized cities was the heavy appreciation in the real estate market between 2020-22.
Homeowners not already in the market quickly found themselves priced out of it.
This was most apparent in the Bay Area and coastal SoCal from Los Angeles to San Diego.
This in turn meant fewer opportunities for flippers and developers.
Those that did exist came with skyrocketing purchase prices.
They also came with:
- thinner returns on investment
- higher capital exposure
- longer time risk
- slower movement in the event of rate rises
None of it is particularly appealing for developers but the increased interest in mid-sized cities is proving their salvation.
The value in mid-sized cities
Mid-sized cities offer better margin velocity compared with their big city rivals.
Take a two-bedroom home in Fresno purchased for $450,000 and renovation costs of $50,000.
A sale price of $575,000 offers a profit of $75,000 or 15 per cent.
A similar seaside house in Carlsbad is bought for $2,000,000 with renovation costs of $100,000 and sells for $2,250,000.
Sure, the $150,000 profit is double that in Fresno.
But the margin is only 7.14 per cent and it required more than three times as much capital to facilitate.
That’s a whole lot more capital risk to take on.
Many inland markets offer properties requiring a much smaller investment with strong entry-level buyer demand and deep FHA and conventional buyer pools.
In January, 2026, Zillow reported the following median prices for key inland centres:
Ontario – $661,303
Riverside – $635,032
San Bernardino – $479,006
Sacramento – $468,296
Modesto – $436,088
Bakersfield – $390,137
Fresno – $383,440
Easier finance with hard money
Savvy flippers and developers already know hard money is the best source of capital for their ventures because of its speed, accessibility and flexibility.
They’ll also find it much easier to gain approval on a $500,000 loan for that house in Fresno as opposed to a $2.1m loan for Carlsbad.
Lenders don’t like risk, they prefer sure things and fast returns on their investments.
That’s why they like and quickly approve:
- mid-sized loans in the range of $400k-$800k
- faster DOM (days on market), reducing the time between a listing and a sale
- larger buyer pools
Get finance and support today
Even for experienced flippers, it makes good sense to reduce your risk by limiting your capital exposure.
Flippers and developers can take advantage of migration trends and the need for redeveloped housing across numerous Californian mid-sized cities.
Importantly, they can do it without the need to borrow bigger sums of money.
If you’d like to know more, a chat with the experts at Equidy is a must.
Equidy has an intimate and personal history with all aspects of property development in California and has done so for well over 40 years.
But their depth of knowledge isn’t restricted to urban centers.
Equidy is well versed on the generational shift underway that is driving people towards California’s mid-sized cities.
They can advise you about liquidity pockets offering unique opportunities to help you maximize the return on your investment without putting yourself at unnecessary financial risk.
Equidy is also a hard money lender that can finance flippers and developers in as little as 48 hours.
It makes them the ideal partner and mentor for every flipping project in California from Sacramento to San Diego.
They stand by their core belief that anything is possible and they strive to prove it every single day.
Even in challenging economic times, they vow to reward entrepreneurship and resolve to help their clients realize their wealth creation dreams.
Equidy enjoys long and established relationships with serious investors, sellers and real estate professionals while leveraging their reputation and trust, using clear communication to minimize the risk to all parties.
Contact Equidy today to book your free strategy call.
