By Nathalie Voit
Record-high home prices have prompted many potential U.S. homebuyers to relocate.
According to a report from real estate brokerage platform Redfin, one in three Redfin.com users are looking to migrate from one metro area to another due to surging housing prices. Redfin said the share of homebuyers searching for a new home in a less expensive city increased from 32.3% to 32.6% in the second quarter.
Compared to three years ago, in Q2 2019, the number of people looking to move out from their home metro area is significantly higher, up from 25.2%.
Redfin noted that although the red-hot market pushed out a lot of potential homebuyers, those who can still afford to buy a house amid a sales-induced slowdown are searching for property in less expensive locales.
Warm-weather states like Florida, particularly, are attracting many out-of-state homebuyers. According to the report, Miami was the top migration destination in the second quarter, followed by Tampa, FL, Phoenix, AZ, and Sacramento, CA. Two other Sunshine State cities made it to the top 10 list. Other Sun Belt metro areas in Texas and California also saw a lot of prospective homebuyers looking to move in.
In contrast, expensive U.S. coastal centers saw the most net outflow of users, or people wanting to relocate to lower cost-of-living destinations. San Francisco reported the most outward migration of homebuyers in Q2, followed by Los Angeles, CA, New York, NY, and Washington, D.C.
Net outflew grew year-over-year in four of the five top places people are leaving, except New York, where outflow declined.
“The typical home in San Francisco or San Jose now costs more than $1.5 million,” Redfin’s deputy chief economist Taylor Marr said in the report. “Add in today’s 5%-plus mortgage rates, and you have a sky-high monthly payment.”
“Those factors, along with more companies giving employees the permanent flexibility to work remotely, are driving a larger portion of buyers to consider homes in other parts of the country. Someone who would have to stretch beyond their budget in Los Angeles may be able to comfortably afford a home in Phoenix or San Antonio.”
To compile its list, Redfin analyzed the search history of more than two million users spanning 100 metro areas. Redfin excluded searches that did not indicate actual homebuying intent to ensure accuracy in U.S. migration patterns. Popularity was measured by net inflow, or how many Redfin users searched for homes in a given area compared to those who sought to leave.
“We believe our data is a strong leading indicator of actual moving decisions,” Marr said.
