Record Share of Homebuyers Relocate, Driven by Moves Away from Expensive Coastal Areas
A record 33.9% of Redfin.com users nationwide looked to move from one metro to another in July and August, up from 32.6% in the second quarter and 26% before the pandemic.
“The overall slowdown and the popularity of relocating are both due to high home prices and mortgage rates that have doubled since last year,” said Redfin Deputy Chief Economist Taylor Marr. “Six percent mortgage rates are exacerbating already-high home prices and motivating homebuyers–especially remote workers–to leave expensive areas for more affordable ones. Persistent inflation and slumping stocks are also cutting into buyers’ budgets, making relatively affordable areas even more attractive.”
More homebuyers left the Bay Area than any other metro in July and August. Next come Los Angeles, New York, Washington, D.C. and Boston, all expensive job centers highly populated by remote workers with the flexibility to relocate. Migration out of four of those five places—Los Angeles, New York, Washington, D.C. and Boston—increased from a year earlier.
The number of homebuyers looking to move out of the Bay Area declined, likely because it’s one of the only parts of the U.S. where home prices are dropping year over year, giving buyers in the perennially expensive area a bit of relief. Prices fell 8% year over year in San Francisco, 1.6% in Oakland and 0.2% in San Jose.
Miami was the most popular migration destination, continuing a year-plus streak of the South Florida metro taking the number-one spot. Next come two California metros: Sacramento, perennially popular for homebuyers moving from one metro to another, and San Diego, which only recently jumped onto the list of most popular destinations. Las Vegas and Tampa, Fla., round out the top five, followed by Phoenix, Cape Coral, Fla., North Port, Fla., Portland, Maine and San Antonio, Texas.
Nine of the 10 most popular destinations are warm-weather metros located in the Sun Belt (Portland the exception). Eight of the 10 have median sale prices below $500,000; Sacramento ($570,000) and San Diego ($800,000) are the exceptions. And six of them are located in places with no state income tax, which lowers the overall cost of living. Although home prices in many of the popular destinations have increased significantly throughout the pandemic, they’re still more affordable than the places homebuyers are coming from. The typical home in Las Vegas, for instance, sold for $416,000 in August, half of the $845,000 median in Los Angeles, the number-one origin for people moving in.
The report can be accessed here.
