Redfin: Record Share of Homebuyers Looking to Relocate
Redfin, Seattle, reported the share of homebuyers looking to relocate jumped in July as high mortgage rates and home prices motivated Americans to move to more affordable areas.
A record 33.7% of Redfin.com users nationwide looked to move from one metro to another in July, up from 32.6% in the second quarter and about 26% before the pandemic.
The report noted even as the overall housing market has cooled this spring and summer due to 5%-plus mortgage rates and economic woes, the share of relocating buyers out of all buyers continued to grow, motivated by high home prices and mortgage rates, combined with permanent remote work, enabling buyers to move from expensive parts of the country to more affordable areas.
Redfin reported Miami as the most popular migration destination in July, as it has been in the first half of the year. But migration into the South Florida metro is starting to slow, with fewer homebuyers looking to move to Miami than a year earlier. Movement into a few other perennially popular destinations has started to slow, too, even as the overall share of relocators hit a record high. Sacramento was the second-most popular destination in July, but there’s less movement into the California capital than a year earlier.
And after many months as one of the three most popular destinations, Phoenix fell to number 6 in July, with a sizable decline in out-of-town homebuyers looking to move there. That’s partly because Phoenix home prices rose so much during the pandemic, increasing 20% year over year to $485,000 in June, well above the national median of $428,000.
San Diego followed the opposite trajectory, catapulting to third on the list of most popular destinations. That’s the highest ranking it has reached since Redfin started tracking migration data in 2017, and a jump from number 7 in the second quarter. Migration into San Diego has more than doubled from a year ago, with Los Angeles as the most common origin of homebuyers moving there, and Seattle as the most common out-of-state origin. Even though San Diego home prices are on par with Los Angeles and Seattle, relocators are seeking out 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,” said San Diego Redfin agent Jodie Lee. “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 with out-of-town buyers, landing on Redfin’s top 10 list for the first time. It’s especially popular with Bostonians, both those relocating and those purchasing vacation homes. Tampa, Las Vegas, North Port, Fla., Cape Coral, Fla. and San Antonio, Texas, perennially popular with out-of-town buyers, were also on the top 10 list in July. The flow of people moving to all but one of those places was up from a year earlier (San Antonio is the exception).
On the flip side, more homebuyers left the Bay Area, Los Angeles and New York in July than any other metro, unchanged from the first half of the year. Washington, D.C. and Boston round out the top five. Net outflow increased from a year earlier in four of those five places. The Bay Area, where outflow slowed from a year earlier, is the exception. That’s partly because northern California housing markets are cooling faster than anywhere else in the country, with San Francisco home prices dropping year over year in June, the only decline in the U.S.
“Though Bay Area homes still sell for well over $1 million, homebuyers there may be getting a break from competition,” Redfin said.
