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A Record 25% of Home Searchers Looked to Move to a New Metro at the End of 2022 as High Housing Costs Drove Relocation – Yahoo Finance

Economic uncertainty and 6%-plus mortgage rates caused fewer Americans to purchase homes in the fourth quarter. But those who did buy relocated at an unprecedented rate due to remote work and the allure of more affordable options

SEATTLE, January 23, 2023–(BUSINESS WIRE)–(NASDAQ: RDFN) — A record one-quarter (24.6%) of Redfin.com users looked to move to a different metro area in the fourth quarter, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s up from 22.1% a year earlier and around 18% before the pandemic.

The people who are buying homes are relocating at an unprecedented rate because elevated mortgage rates, still-high home prices and economic uncertainty are driving many of them–especially remote workers–to more affordable areas.

But those same factors also caused the overall pool of homebuyers to shrink, with pending home sales down more than 30% from a year ago at the end of 2022. Many homeowners are also reluctant to move because they don’t want to give up their relatively low mortgage rate. Eight of the top 10 migration destinations in the fourth quarter all had fewer homebuyers looking to move in than a year earlier. Sacramento and Las Vegas, the most popular destinations, both had net inflows of around 5,500, down from roughly 6,500 a year earlier. Phoenix, the fifth most popular destination, had a net inflow of about 4,000 in the fourth quarter, down from more 8,000. Net inflow is the number of people looking to move into a metro minus the number of people looking to leave.

“Phoenix is typically a huge vacation-home market, but I’ve seen a big decline in people purchasing second homes and investment properties lately. There are still out-of-towners buying homes and moving here full time, though that has also slowed down over the last several months as mortgage rates have risen,” said local Redfin agent Heather Mahmood-Corley. “Still, the cost of living in Phoenix is low compared to places like the Bay Area, Seattle, Denver and parts of the East Coast, where many out-of-towners are coming from. I helped one client buy a home in Washington State in 2016, and it has doubled in value. She sold that home last year and used the proceeds to buy a much bigger, nicer house in Phoenix.”

Sun Belt cities are the most popular destinations for relocators

After Sacramento and Las Vegas, Miami was the most popular migration destination in the fourth quarter. It’s followed by Tampa and Phoenix. Popularity is determined by net inflow.

Although home prices have soared in popular destinations like Las Vegas and Phoenix since the start of the pandemic as remote workers have moved in, they’re still far more affordable than places like the Bay Area or New York.

The typical home in eight of the 10 most popular destinations is less expensive than the typical home in the most common origin. For example, Sacramento’s $540,000 median sale price is significantly cheaper than $1.4 million in San Francisco, the top origin of out-of-towners coming to Sacramento. (Cape Coral, FL and North Port-Sarasota, FL, with Chicago as the top origin, are the exceptions). Warm weather is also attractive to relocators; all 10 of the top destinations are known for their sunny climates, and five are in Florida.

Top 10 Metros Homebuyers Are Moving Into, by Net Inflow

Net inflow = Number of Redfin.com home searchers looking to move into a metro area, minus the number of searchers looking to leave

Rank

Metro*

Net Inflow, Q4 2022

Net Inflow, Q4 2021

Top Origin

Top Out-of-State Origin

1

Sacramento, CA

5,700

6,600

San Francisco, CA

Chicago, IL

2

Las Vegas, NV

5,400

6,300

Los Angeles, CA

Los Angeles, CA

3

Miami, FL

5,300

9,500

New York, NY

New York, NY

4

Tampa, FL

4,000

6,500

New York, NY

New York, NY

5

Phoenix, AZ

4,000

8,400

Los Angeles, CA

Los Angeles, CA

6

Dallas, TX

3,400

6,700

Los Angeles, CA

Los Angeles, CA

7

Cape Coral, FL

3,300

4,700

Chicago, IL

Chicago, IL

8

North Port-Sarasota, FL

2,900

4,500

Chicago, IL

Chicago, IL

9

Houston, TX

2,800

2,100

New York, NY

New York, NY

10

Orlando, FL

2,800

1,000

New York, NY

New York, NY

*Combined statistical areas with at least 500 users searching to and from the region in October-December 2022

Homebuyers are leaving expensive coastal job centers

More homebuyers looked to leave San Francisco than any other metro in the fourth quarter, followed by Los Angeles and New York. The ranking of places homebuyers are moving away from is determined by net outflow, a measure of how many more people are looking to leave a metro than move in.

Washington, D.C. and Chicago round out the top five, followed by several other large northern job centers. Those are typically the places homebuyers looked to leave, as they tend to be expensive.

There are fewer homebuyers leaving most of those places than there were a year earlier, reflecting the slow housing market. The net outflow from seven of the top 10 metros was smaller in the fourth quarter than a year earlier.

Top 10 Metros Homebuyers Are Leaving, by Net Outflow

Net outflow = Number of Redfin.com home searchers looking to leave a metro area, minus the number of searchers looking to move in

Rank

Metro*

Net Outflow, Q4 2022

Net Outflow, Q4 2021

Portion of Local Users Searching Elsewhere

Top Destination

Top Out-of-State Destination

1

San Francisco, CA

26,900

40,000

24%

Sacramento, CA

Seattle, WA

2

Los Angeles, CA

23,100

32,000

20%

San Diego, CA

Las Vegas, NV

3

New York, NY

17,600

19,300

27%

Miami, FL

Miami, FL

4

Washington, D.C.

12,900

13,600

18%

Virginia Beach, VA

Virginia Beach, VA

5

Chicago, IL

6,300

5,200

17%

Milwaukee, WI

Milwaukee, WI

6

Boston, MA

4,900

8,000

18%

Portland, ME

Portland, ME

7

Denver, CO

2,700

3,100

31%

Chicago, IL

Chicago, IL

8

Detroit, MI

2,200

1,000

30%

Cleveland, OH

Cleveland, OH

9

Seattle, WA

1,500

15,400

17%

Phoenix, AZ

Phoenix, AZ

10

Hartford, CT

1,500

500

71%

Boston, MA

Boston, MA

*Combined statistical areas with at least 500 users searching to and from the region in October-December 2022

To view the full report, including additional charts and methodology, please visit: https://www.redfin.com/news/housing-migration-trends-Q4-2022

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country’s #1 real estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 5,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release distribution list, email press@redfin.com. To view Redfin’s press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230123005641/en/

Contacts

Redfin Journalist Services:
Ally Braun, 206-588-6863
press@redfin.com

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