BAM Key Details:
- A new Redfin report shows the number of Redfin.com users looking to relocate to different areas of the country fell 6% year over year, while within-metro moves fell 17%—nearly three times as much.
- For context, that number rose 23% in April 2022.
- As a percentage of total home purchases (a “slice of the homebuying pie”), out-of-town moves are holding up better than within-metro moves, with a record 25.2% of Redfin home shoppers looking to relocate to different metros.
A record share of Redfin.com users are looking to relocate
Just over a quarter (25.2%) of Redfin.com users nationwide are looking for homes outside their current metro—a record high and up from 22.8% in April 2022 and from about 19% just before the onset of the pandemic. Redfin’s records go back through 2018.
Fewer people are moving, so fewer are relocating to different markets. Overall home sales fell 22% from one year ago in April as high mortgage rates and near record-low inventory levels kept many buyers on the sidelines.
Within-metro moves have declined substantially more than out-of-town moves
But while out-of-town moves have declined by 6%, buyers moving within their current metro have declined nearly three times as much at 17%.
Here are some of the reasons why out-of-town moves are still happening at a higher rate:
- Many are leaving their hometowns for more affordable areas where high mortgage rates are less of a deterrent (For example, New York to Tampa or Los Angeles to Las Vegas). Remote work makes this more feasible for many.
- First-time home buyers, in particular, may be motivated by high mortgage rates to move to a different and more affordable area—especially one with a more abundant supply of affordable homes.
- People moving to a completely different area may also be moving because of life circumstances that compel them to relocate—to take a new job, for example, or to take care of a family member.
By comparison, many would-be buyers who want to stay in their current market are more likely to press pause on their home search because their desire for more space, a different layout, or greater proximity to a favorite spot doesn’t justify the additional cost.
Florida is the most popular destination for relocating home buyers
Of the top 10 metros for relocation, Phoenix and Miami rank as the most popular destinations for home shoppers on Redfin.com. Five of those top 10 are in Florida, and almost all are in the Sun Belt.
Popularity is based on net inflow—how many more Redfin.com users looked to move in than to move out. And buyers are deliberately favoring sunny and relatively affordable metros with lower taxes. They’re leaving pricey coastal metros like Los Angeles, Seattle, and NYC.
As the remote work trend took off during the pandemic, Florida’s popularity skyrocketed, with many buyers moving there for the relatively affordable homes and the sunshine. And, in spite of worsening climate disasters, Florida still attracts a steady influx of relocating home buyers, many of whom are migrating from colder northern metros. For example, New York City is the most common origin for buyers relocating to Miami, Tampa, and Orlando. And Chicago is the most common origin for buyers moving to North Port-Sarasota and Cape Coral.
According to Orlando Redfin agent Nicole Dege, roughly half of the people buying homes there are from out of town, and some of them are able to pay cash—which makes it difficult for locals to compete and get their offers accepted. It doesn’t help, either, that many buyers have limited homebuying budgets thanks to high mortgage rates and fierce competition for affordable homes.
Even with fewer buyers coming from other areas, there are fewer homes to choose from.
Top 10 relocation destinations by net inflow
- Phoenix, AZ (with a net inflow of 7,500 in April 2023—down from 9,100 in April 2022)
- Miami, FL (7,500—down from 13,000)
- Las Vegas, NV (6,400—down from 7,100)
- Tampa, FL (5,800—down from 9,000)
- Orlando, FL (5,300—up from 1,900)
- North Port-Sarasota, FL (5,000—down from 6,300)
- Cape Coral, FL (4,700—down from 6,800)
- Dallas, TX (4,700—down from 6,400)
- Sacramento, CA (4,600—down from 8,800)
- Houston, TX (4,000—down from 5,300)
Buyers are leaving expensive coastal metros
More Redfin.com users are looking to leave San Francisco than any other metro in the U.S., followed by New York, Los Angeles, Washington, D.C., and Boston.
Net outflow measures how many more buyers are looking to leave a metro than to move into it. And pricey coastal metros, especially tech hubs like the Bay Area, are typically the ones seeing the biggest net exodus.
Homes in these metros are expensive, and as high mortgage rates drive up monthly mortgage payments faster in these markets, more buyers are packing up and leaving for metros with a similar degree of luxury at a lower price.
Top 10 metros buyers are leaving by net outflow
- San Francisco, CA (with a net outflow of 29,800—down from 40,500 in April 2022)
- New York, NY (24,000—down from 25,100)
- Los Angeles, CA (20,400—down from 29,500)
- Washington, D.C. (17,500—down from 19,000)
- Boston, MA (5,300—down from 10,100)
- Seattle, WA (4,300—down from 19,600)
- Denver, CO (3,900—down from 5,200)
- Hartford, CT (3,400—up from 900)
- Minneapolis, MN (3,000—up from 2,100)
- Chicago, IL (2,900—down from 4,900)
Takeaways for real estate agents
If you work in a metro with a high net inflow (or outflow), both buyers and sellers will need to know what to expect—what buyers can expect to pay for homes in the area and what sellers should aim for with the pricing of their homes. And that’s just the tip of the iceberg.
Collect and share all the information your clients and prospects need—at both the local and macro levels—to make smart choices that lead to real wealth and affordable housing costs.
Also, it doesn’t hurt to know the pros and cons of living in your area, so you can help both buyers and sellers to identify what they’re looking for and what they can do without.