According to a new Redfin report, the share of homebuyers looking to relocate to different metro areas reached an all-time high of 33.7% in July—rising from 32.6% in the second quarter and roughly 26% before the pandemic.
The general trend away from more expensive metros intensified during the pandemic with increased remote work among white-collar workers. High mortgage rates and rising home prices have spurred the migration to more budget-friendly areas.
Affordability and sunny weather
Remote work has seen a dramatic increase since the early days of the COVID pandemic, which has given many Americans the freedom to move from one area to another—often choosing more affordable metros with sunny weather.
Other draws include lower taxes, wide open spaces, and better access to the outdoors.
So, while we’ve seen an overall cooling in the U.S. housing market this spring and summer, the share of relocating buyers has reached a record-breaking high.
Migration to Miami and Phoenix slowed
While Miami was the number one migration destination in July, net inflow to the South Florida metro has started to decline.
And after several months as one of the top three most popular migration destinations, Phoenix dropped to number six in July, partly because of the steep rise in Phoenix home prices during the pandemic.
Year over year, prices increased 20% to $485K in June, well over the national median of $428K.
Sacramento, which was the second-most popular migration hotspot in July, has also seen a year-over-year drop in homebuyers moving in from other areas.
San Diego and Portland, Maine move up the list
On the flip side, San Diego has catapulted to number three on Redfin’s top ten list—the highest ranking it has achieved since Redfin started tracking migration data (2017) and a sizable jump from its spot at number seven in the second quarter.
Migration has gone up over 100% from July 2021, with Los Angeles as the most common city of origin. Seattle is the most common out-of-state origin.
A slower pace of life
Affordability isn’t the only factor driving out-of-state buyers to sunnier metros. San Diego’s home prices are on a par with Los Angeles and Seattle, but many of those migrating from the Bay Area and other locations seek 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. 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—especially with Bostonians—hitting Redfin’s top ten list (for net inflow) for the first time.
Net outflow increases for expensive coastal job areas
Meanwhile, more homebuyers left pricey coastal job centers like the Bay Area, Los Angeles, New York City, Washington, D.C., and Boston in July than any other metro.
Four out of five of those metros saw an increase in net outflow. At the same time, migration from the Bay Area has slowed—partly because housing markets in northern California are cooling faster than anywhere else in the U.S.
Top takeaways for real estate agents
If you’re an agent working in one of the areas seeing an increase in net inflow, you’re likely seeing more competition for listings. In areas where outflow has increased, it’s all the more important for you to know how to help sellers get the best possible price for their homes.
Help consumers on both sides understand the data most relevant to them, so they can make informed decisions, whether they’re entering your market or planning to relocate to another one.
