Smaller Metros—and Fewer Disasters—On Home Buyers’ Radar Screens
The coronavirus has caused a sea change in Americans’ attitudes toward home.
With millions now working from home—many permanently—they are rethinking everything: how to repurpose rooms; how many cars they need to own; and especially, where they want to live, not where they need to live.
A new report from Redfin, Seattle, finds the latter factor top of mind with an increasing number of Americans. A record 29% of Redfin.com users looked to move to a different metro area in the third quarter.
A separate Redfin survey found with so many natural disasters affecting large parts of the U.S. in recent years, many homeowners are rethinking where they want to live with safety in mind. More than a quarter (27%) of Americans said that recent natural disasters such as fires, floods and storms have made them want to move away from where they currently live, or have changed where they want to move. These findings are based on an October Redfin survey of more than 3,000 U.S. residents.
“Remote work has opened up a whole new world of possibilities when it comes to buying a home,” said Redfin chief economist Daryl Fairweather. “Many residents of expensive areas like New York or Los Angeles couldn’t manage to afford rent and save for a home at the same time. So, it’s no wonder that these folks are looking to buy homes in much more affordable places like Louisville and Little Rock.”
The report said Santa Barbara has grown the most in popularity with people moving in from out of town over the last year, followed by Louisville, Ky., and Buffalo, N.Y. Net inflow—the number of people looking to move in minus the number of people looking to leave—to Santa Barbara increased by 124% over the last year. In Louisville, net inflow increased by 113% and in Buffalo it increased by 107%.
The increasing popularity of Louisville, Buffalo and most of the other destinations on the top 10 list such as El Paso and Tulsa are likely due in part to their affordability. But Santa Barbara is an expensive outlier. The typical home in the metro sold for $855,000 in September, well above the $730,000 median in Los Angeles, located about 90 miles south of Santa Barbara and the number one origin for people moving there.
“Homebuyers are moving into Santa Barbara and its surrounding beach towns from Los Angeles and San Francisco,” said local Redfin agent John Burdick. “Santa Barbara has become even more popular since the beginning of the pandemic as remote workers leave dense cities for picturesque places with more open spaces and beaches. Another advantage is that it’s not too far from Los Angeles, so remote workers have the option of commuting one or two days a week when offices open.”
Excluding Santa Barbara, all the metros that have grown the most in popularity with out-of-towners are relatively affordable, with median home prices below the national median of $334,000. The typical home in Louisville sold for $229,000 in September, and in Buffalo it was $190,000. Six of the top 10 are located in the South, and two are in the state of New York.
Los Angeles and New York are the number one places Redfin.com users are leaving as they move to the areas growing most in popularity. Los Angeles is not only the number one origin for people looking at homes in the Santa Barbara metro, but it’s also the top origin for people looking in El Paso, Little Rock and Tulsa. New York City metro is the top origin for people looking in Buffalo and Syracuse, plus Louisville and Greenville, SC. Statewide, both California and New York have seen significant upticks in the number of people looking to leave over the last year, more than any other state.
Recent natural disasters such as fires, floods and storms have made them want to move away from where they currently live, or have changed where they want to move. Meanwhile, half of Americans said that recent natural disasters have had no impact on their feelings about where they live, and almost a quarter (23%) said that such events have made them like where they live more.
Wildfires have ravaged the U.S. this year, burning millions of acres across California, Oregon, Washington and Colorado. Six of the 20 largest wildfires in California history have taken place in 2020 alone, and two of the state’s ongoing blazes—the Silverado Fire and the Blue Ridge Fire—put nearly 100,000 Southern California residents under emergency evacuation orders. The U.S. has also experienced 27 named storms this year, just one away from the annual record set in 2005. The latest to hit was Hurricane Zeta, which made landfall in Louisiana on Wednesday, leaving several people dead and more than 2.1 million without power.
“Climate change still doesn’t feel like an immediate threat to a lot of people, but as more folks come face to face with wildfires, hurricanes and floods, we’ll see an increase in the number of Americans who consider moving due to natural disasters,” Fairweather said. “Climate change could also become a bigger factor in the homebuying process if insurance companies stop offering coverage in catastrophe-prone areas.”
One-third of survey participants in the Northeast said that recent natural disasters have made them want to move away from where they currently live, or have changed where they want to move to. That compares with 28% of respondents in the South, 27% in the West and 23% in the Midwest.
The report can be accessed at https://www.redfin.com/news/natural-disasters-climate-change-impact-housing/.