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Migration Trend Reaches Record High; One in Four People Searching for Home Looks to Change Metros
Twenty-five percent of home searchers looked to move to another metro area in the fourth quarter, up from 23 percent the year before, said Redfin, Seattle. A separate report from Trulia, San Francisco, said migration patterns to warmer climates continue as Baby Boomers seek a respite from harsh winters.
The report national share of home searchers looking to relocate has been steadily increasing since Redfin began reporting on migration in early 2017 and currently sits at its highest level on record. The analysis is based on a sample of more than one million Redfin.com users who searched for homes across 87 metro areas from October through December.
San Francisco, New York, Los Angeles, Washington, D.C. and Denver posted the highest net outflows in the fourth quarter. Of all San Francisco Bay Area residents using Redfin, 24 percent were searching for homes in another metro, up from 19 percent during the same time period a year earlier. Denver made the biggest move up the list from a year earlier, flipping from modest net inflows and outflows throughout 2017 to strong net outflows through late 2018. Last quarter, 24 percent of Denverites on Redfin.com searched for homes outside the area, up from 17 percent a year earlier.
On the flip side, Seattle’s net inflow surged to make it the fifth-most popular migration destination in the fourth quarter, behind nearby Portland and the relatively affordable metros–Sacramento, Phoenix and Atlanta–that have long dominated this list. Although the number of home sales in Seattle declined sharply at the end of the year (down 22 percent in December), search interest remained still high. Redfin Chief Economist Daryl Fairweather said Washington’s lack of an income tax might be helping Seattle to continue attracting people, as new tax policies enacted just over a year ago favor areas where homebuyers can avoid hitting the $10,000 SALT cap.
“In both Seattle and Denver prices were growing rapidly in 2017 and early 2018 to the point that buyers backed off in the second half of 2018,” Fairweather said. “However, people looking to leave high-tax metros for a city with mountain views and top-notch hiking are more likely to pick Seattle over Denver because Washington State doesn’t have an income tax. In fact, the top destination for Denverites looking to leave is Seattle.”
Meanwhile, Trulia found while only 15 percent of home searches from markets with below-freezing winters (average 32 degrees or lower) went to metros with warmer winters (average 50 degrees or higher) in December, that’s up from 13.5 percent in August. Driving those home searches:
–Seven in 10 places with the highest share of winter traffic aimed at warmer markets are from the rustbelt portion of the Midwest and North east where job growth has been chronically weak.
–Florida tops the list for snowbird retirees, with nearly seven in 10 cold-weather searches in the Sunshine State. Naples is the most popular housing market with 43.3 percent of all searches coming from colder metros, followed by Cape Coral, Sarasota and West Palm Beach.
–The snowbird effect on home searches is more pronounced in metros with the coldest winters. For example, searches from Green Bay, Wis. to Tampa jumped to 25.1 percent in December from 14 percent in August.
“Conventional wisdom might suggest that as the weather cools and home searchers in the nation’s chilliest locales hunker down for the winter, we might see a winter surge in searches originating in colder climes and ending in warmer places,” said Trulia Housing Economist Felipe Chacón. “But conventional wisdom isn’t always right. The reality is nuanced, and seasons don’t seem to have a large impact on our cold-to-hot search behaviors. Generally speaking though, metros with the coldest winters do see bigger seasonal bumps than those that are less chilly.”
Additionally, Chacón said while retirees likely make up a bulk of those looking to flee the cold and embrace the sun in the winter months, it’s also likely that many younger home searchers looking to leave colder climates may be attracted just as much by hot job markets as they are by warmer weather.