BAM’s Key Details:

  • A near-record high of Redfin.com users were looking to migrate to different areas
  • This finding is based on a new Redfin report for the three months ending October 2022
  • Five of the top ten migration destinations are in Florida

A new Redfin report shows a near-record high in Redfin.com users (24.1%) looking to migrate to different areas in the three months ending in October 2022. 

That’s consistent with the third quarter’s record high of 24.2% and up from about 18% in 2019, before the pandemic motivated remote workers to leave pricey coastal metros for more affordable Sun Belt locations. 

Redfin-chart

Source: Redfin

What makes a Redfin.com user a migrant?

A Redfin.com user counts as a migrant if they viewed a minimum of 10 for-sale listings in the third quarter—and at least one was outside their current metro area. 

Redfin’s analysis includes combined statistical areas with a minimum of 500 Redfin.com users living in that region and a minimum of 500 users looking for homes in that region. Redfin’s data on homebuyer migration goes back to 2017. 

High mortgage rates + economic uncertainty drive buyers to more affordable metros

The U.S. housing market has slowed significantly in the second half of 2022, thanks to high mortgage rates and home prices, inflation and widespread economic uncertainty. 

October’s average 30-year fixed mortgage rate was 6.9% — up 3.83% from a year ago, the biggest year-over-year increase since 1981. At that rate, monthly mortgage payments have doubled since the beginning of the year. 

And the more expensive the metro to begin with, the bigger the increase in its monthly cost. 

According to Redfin’s study, an unprecedented share of users are looking to move to areas outside their current metros. And the top ten migration destinations are in the Sun Belt. 

Sacramento, Las Vegas, and Miami were the top three destinations for Redfin.com users looking to migrate, with San Diego and Tampa rounding out the top five. 

The ranking is based on net inflow—the number of people looking to move into a metro area minus the number looking to leave. 

Five of the top 10 metros on Redfin’s list are in Florida: 

  • Miami
  • Tampa
  • Cape Coral
  • North Port-Sarasota
  • Orlando

That’s despite the well-known fact that the state was hit hard by Hurricane Ian, one of the deadliest and most devastating storms in U.S. history, in late September. 

While demand has driven up prices in Sun Belt metros, including those in Florida, buyers still consider them desirable locations for their next home, mainly because they can get more home for less money. 

For example, the typical home in Las Vegas costs around $410,000—about half the price of the typical home in Los Angeles ($823,000), which is the most common origin city for people moving to Vegas.

Redfin-table--top-ten-metros-net-inflow

Source: Redfin

Homebuyers are leaving pricey West Coast and East Coast metros

When everything else—food, gas, utilities—has gotten more expensive, it’s understandable that more buyers would look to leave expensive East and West Coast metros. 

Judging by Redfin’s list of the top 10 metros people are looking to leave for more affordable ones: San Francisco, Los Angeles, and New York are the top three, followed by Washington, D.C., and Boston. 

The ranking for this list is based on net outflow—the number of Redfin.com users looking to leave an area minus those looking to move into it. 

Homebuyers are more likely to leave expensive coastal job centers than other places—mainly due to remote work and soaring housing costs. Workers who don’t have to live in the areas where their jobs are located can choose more affordable metros. 

Migrating buyers most often head to more affordable areas in their home state—like Sacramento, which is a common migration destination for buyers leaving Bay Area metros.

Redfin-table--top-ten-metros-net-inflow

Source: Redfin

Top takeaways for real estate agents

Buyers looking to move to more affordable metros still look to Sun Belt metros, with half the top ten located in Florida, despite the damage and death toll of Hurricane Ian. 

If you’re living in and serving one of these metros, you’re in a position to help migrating buyers find homes that are kinder to their stretched budgets than the metros they’re leaving. 

In this market, the agents who will thrive are the ones that consider each client’s needs when helping them find a home they love—and get the best possible deal for it.