July Figures Show a New Record for Share of Homebuyers Seeking to Relocate

0

The share of homebuyers looking to relocate jumped in July as high mortgage rates and home prices motivated Americans to move to more affordable areas, according to a new report from Redfin. A record 33.7% of Redfin.com users nationwide looked to move from one metro to another, up from 32.6% in the second quarter and about 26% before the pandemic.

Migration within the U.S. intensified with the pandemic, as remote work gave many Americans the freedom to move from one metro area to another, often prioritizing factors like affordability and sunny weather.

Even as the overall housing market has cooled this spring and summer due to 5%-plus mortgage rates and economic woes, the share of relocating buyers out of all buyers is at an all-time high. That’s because high home prices and mortgage rates, combined with permanent remote work, are motivating buyers to move from expensive parts of the country to more affordable areas.

San Diego, Calif. and Portland, Maine became more popular with out-of-town buyers, while migration into Miami, Fla. and Phoenix, Ariz. slowed. Miami was the most popular migration destination in July, as it was in the first half of the year. But migration into the South Florida metro is starting to slow, with fewer homebuyers looking to move to Miami than a year earlier. Popularity is measured by net inflow, or how many more Redfin.com users looked to move into an area than leave.

Movement into a few other perennially popular destinations has started to slow, too, even as the overall share of relocators hit a record high. Sacramento was the second-most popular destination in July, but there’s less movement into the California capital than a year earlier.

After many months as one of the three most popular destinations, Phoenix fell to number 6 in July, with a sizable decline in out-of-town homebuyers looking to move there. That’s partly because Phoenix home prices rose so much during the pandemic, increasing 20% year over year to $485,000 in June, well above the national median of $428,000.

San Diego followed the opposite trajectory, catapulting to third on the list of most popular destinations. That’s the highest ranking it has reached since Redfin started tracking migration data in 2017, and a jump from number 7 in the second quarter. Migration into San Diego has more than doubled from a year ago, with Los Angeles, Calif. as the most common origin of homebuyers moving there, and Seattle, Wash. as the most common out-of-state origin. Even though San Diego home prices are on par with Los Angeles and Seattle, relocators are seeking out a slower pace of life.

“We’ve always had a lot of people from the Bay Area and Los Angeles move to San Diego for a better work-life balance and a beachside lifestyle, and it has picked up since remote work became commonplace,” comments San Diego Redfin agent Jodie Lee. “This year, I’ve also seen quite a few remote workers move in from places like Seattle and North Carolina because they like the sunny weather and outdoor activities in this area. San Diego also has a big military presence, and more service members are relocating here now that the cooling market means they have a better chance of getting an offer with a VA loan accepted.”

Portland, Maine is also becoming more popular with out-of-town buyers, landing on Redfin’s top 10 list for the first time. It’s especially popular with Bostonians, both those relocating and those purchasing vacation homes.

Cities perennially popular with out-of-town buyers, were also on the top 10 list in July: Tampa, Fla.; Las Vegas, Nev.; North Port, Fla.; Cape Coral, Fla.; and San Antonio, Texas. The flow of people moving to all but one of those places was up from a year earlier (San Antonio is the exception).

Homebuyers are leaving expensive coastal job centers, though movement out of the Bay Area is slowing. More homebuyers left the Bay Area, Los Angeles and New York in July than any other metro, unchanged from the first half of the year. Washington, D.C. and Boston, Mass. round out the top five. That’s determined by net outflow, a measure of how many more Redfin.com users looked to leave a metro than move in.

It’s typical that homebuyers look to move out of expensive job centers, and the trend has generally intensified during the pandemic as white-collar employees in those places switch to remote work.

Net outflow increased from a year earlier in four of those five places. The Bay Area, where outflow slowed from a year earlier, is the exception. That’s partly because northern California housing markets are cooling faster than anywhere else in the country, with San Francisco home prices dropping year over year in June, the only decline in the U.S. Though Bay Area homes still sell for well over $1 million, homebuyers there may be getting a break from competition.

Read the full report here.

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments