Home Prices Soaring in Popular Migration Destinations
(A new home development in Phoenix; photo courtesy D.R. Horton.)
Phoenix, Dallas and Orlando saw the most migration activity in the U.S.—and some of the highest home price appreciation as well, reported Redfin, Seattle.
Redfin reported the Phoenix metro gained nearly 85,000 residents from other metro areas in 2021, far more than any other metro, while Dallas gained 56,000 and Orlando gained 53,000. Nine of the 10 most popular migration destinations of 2021 were in the Sun Belt.
But the report also noted while half of those 10 metros had a median home-sale price under the national median of $383,000 in December, they also saw some of the highest home price appreciation as well. Home-price growth was well above the national growth rate (15% year over year) for all 10 of the most popular destinations in December. Similarly, the average growth in rental payments for new leases far outpaced national growth (14%) in seven of the 10 most popular metros.
In Phoenix, for example, the typical home sold for $435,000 in December, 28% more than a year earlier, and the average monthly rental payment increased 26% year over year to $2,100. Prices of consumer goods and services are also increasing faster in popular migration destinations, with prices in Phoenix up 8.4% year over year in the fourth quarter, the second-highest inflation rate in the U.S.
The report said nationwide, 31% of Redfin.com users looked to move to another metro in 2021, up from 25.6% in 2019, before the onset of the pandemic.
Rounding out the top 10 migration destinations in 2021 were Atlanta; Tampa; Austin, Texas; Las Vegas; Charlotte, N.C.; Denver; and San Antonio.
“Moving across the country is now easier for many Americans, thanks to remote work. That cultural shift is here to stay,” said Redfin Deputy Chief Economist Taylor Marr. “What’s changing is the affordability of the most popular destinations. Some locals, particularly renters who aren’t able to take advantage of rising home values, are getting priced out of places like Phoenix and Austin as the cost of housing and other goods and services go up. New construction tends to be robust in sprawling Sun Belt cities, and local governments ought to continue to prioritize building new homes to keep up with ongoing demand.”
The report said out-of-towners with big budgets are helping fuel rapid price growth in the most popular destinations. In eight of the 10 most popular destinations (the two Florida metros the exception), the average out-of-towner’s budget was at least 15% higher than the average local’s budget in the first quarter.
“Sellers are listing their homes at higher prices than ever before, partly because of huge demand in the last year from out-of-towners,” said Austin Redfin agent Barb Cooper. “I recently had a couple looking for a 2,000-square-foot home anywhere in the Austin area for under $300,000. I had to tell them it doesn’t exist.”
