The number of Redfin.com home searchers looking to relocate to a new metro fell 4.2% from a year earlier in the first quarter, compared with a 15.6% drop for those looking to move within their current metro. That’s according to a new report from the technology-powered real estate brokerage. High costs push homebuyers to cheaper states — and that includes Florida.
Far-flung home searches have held up better than within-metro searches as the overall housing market slows from the pandemic home buying boom. That’s largely because high mortgage rates, still-high home prices and inflation have driven many homebuyers. Especially remote workers with freedom to move to less expensive areas. Relatively affordable places like Phoenix, Las Vegas and parts of Florida are some of the nation’s most popular destinations.
Chasing cheaper prices
“Las Vegas attracts a lot of homebuyers from California, Hawaii, Washington State and other expensive western places,” said Las Vegas Redfin agent Shay Stein. “For most of these buyers, it’s all about affordability. We have no state income tax, very low property taxes and an overall low cost of living. Plus, some people moving in from out of town have enough in their bank account to pay all cash. So today’s elevated rates don’t impact them.”
Home searches outside a homebuyer’s metro surged in late 2020 and early 2021 as remote workers pounced on low mortgage rates and the opportunity to work remotely. Close-to-home searches shot up, too, but not nearly as much.
Looking at the trend another way, house hunters moving to a new area make up a bigger piece of the homebuying pie than ever. A record one-quarter (25.1%) of Redfin.com home searchers looked to relocate to a new metro in the first quarter. That’s up from 22.8% a year earlier and around 18% before the pandemic.
Immigration rebounds from pandemic slump in coastal cities, partly offsetting trend of homebuyers leaving for more affordable places
Immigration into major U.S. coastal cities like New York and Los Angeles has rebounded after dropping off drastically in 2020 and 2021. The uptick in people moving in from other countries partly makes up for the homebuyers flowing out of those areas. Typically to more affordable places.
Related: How a 2019 Law Catalyzed a Florida Hospital-Building Boom
The net inflow of immigrants more than doubled from a year earlier in 2022 in the Bay Area, New York, Los Angeles, Washington, D.C. and Boston. That’s according to a Redfin analysis of U.S. Census data, which shows that immigration into many big American cities has picked up speed after the pandemic-driven slowdown.
Immigrants are flowing into expensive coastal job centers. The same places many homebuyers who are already based in the U.S. are leaving.
Outflows
House hunters looked to leave San Francisco, New York and Los Angeles more than any other major metro in the first quarter, followed by Washington, D.C. and Boston. This ranking is determined by net outflow, a measure of how many more Redfin.com users looked to leave a metro than move in.
“Several years of declining immigration, compounded by Americans flowing out of big coastal cities during the pandemic, resulted in many major coastal cities losing population,” said Redfin Deputy Chief Economist Taylor Marr. “Last year’s immigration rebound was a boon for those cities, which take in most of the people who move to the U.S. from other countries. For the housing and rental markets, the recovery should add enough demand to at least partly make up for the existing residents who move further inland.”
Sun Belt locales are most popular
Miami, Phoenix, Las Vegas, Tampa, FL and Orlando, FL were the most popular destinations for Redfin.com users looking for homes in a different metro in the first quarter. Popularity is determined by net inflow, a measure of how many more Redfin.com users looked to move into an area than leave.
Sun Belt locales are typically the most popular migration destinations, largely because they’re relatively affordable. The typical home in eight of the 10 most popular destinations is less expensive than in its top origin. For instance, the typical Las Vegas home sells for $400,000, less than half the $820,000 median in Los Angeles, where many of its new residents come from. Las Vegas is more expensive than it was before the pandemic. But still much more affordable than a place like Los Angeles.
People are also moving to the Sun Belt from other countries. Immigration into seven of the 10 most popular migration destinations:
- Phoenix
- Tampa
- Orlando
- Cape Coral, FL
- North Port-Sarasota
- Dallas
- Houston–more than doubled from 2021 to 2022.
Still, they’re not gaining nearly as many immigrants as big coastal metros.