The share of homebuyers looking to relocate hit a new record high of 32.4% in January 2022.
As Remote Work Options Increase, Migration to New Locations Increases
Due primarily to increasing remote work options and decreasing affordability, more and more Americans are looking to relocate to less expensive and more spacious living areas.
A recent Redfin study indicates that a record 32.4% of house hunters searched for homes outside their own home metro area in January 2022. This 32.4% of potential relocators is higher than the previous peak, 31.5%, of relocators in Q1 2021 and much higher than the 25% of homebuyers who were looking to relocate pre-pandemic.
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Relocating Migrants Likely to Keep Moving
Daryl Fairweather, Chief Economist with Redfin, said, “I predict the share of homebuyers looking to move to a different area will continue to rise throughout the year. With mortgage rates going up and rents skyrocketing, moving somewhere more affordable is one of the only ways for many Americans to stay within their housing budget.”
The more available and more permanent remote work options become, the more Americans will likely keep moving. The more frustrated buyers become by scant inventory and skyrocketing prices in one area, the more buyers may decide to relocate to another area that has more affordable homes from which to choose.
Importantly, Fairweather added, “Even workers who are unable to work from home should feel confident about finding a job in a new location with the tight labor market.”
Most Popular Destinations for Relocating Buyers
Perennial favorites of relocators remained constant in January 2022. As in Q3 and Q4 2021, Miami was the most popular migration destination. The top five destinations included Miami, Phoenix, Tampa, Sacramento and Las Vegas. Rounding out the top ten destinations for relocators were Cape Coral FL, Dallas, San Antonio, North Port FL and Atlanta.
All of these destinations have warm weather and, importantly, affordability.
The feeder metros to these above destinations in January 2022 included New York City, Los Angeles, and Chicago.
The Potential Problems?
You’ll notice that once the most popular destination for relocators, Austin TX, did not make the cut in January 2022. Why? Austin’s housing market saw prices skyrocket nearly +39.2% y/y to $365.9B in December – the largest gain among the 100 most populous US metros.
Similar home price appreciation could easily happen in these other popular destinations as home prices continue rising and inventories within these destinations become more strained by the influx of relocating migrants. Miami, for example, saw a typical home sell for $436,900 in January, an increase of +18.1% y/y and above the national median price of $376,200. Obviously, that $436,900 is still less expensive than the median sales price of $655,000 in New York, but still…
Redfin’s Chief Economist Fairweather spoke to these potential problems. “While Sun Belt cities like Miami and Phoenix aren’t likely to lose their luster any time soon, rising prices may soon render them slightly less popular for relocators. Home prices – and the costs of other goods and services – are skyrocketing in a lot of these destinations precisely because they’re so popular with out-of-towners. Some homebuyers who prioritize affordability may start searching in less expensive northern cities.”
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Thanks to Redfin.
