Today’s top home buyers, millennials, play an important role in where the second top buyers, baby boomers, choose to live. Retirement often comes with a complete change in lifestyle, and many baby boomers are using their children and grandchildren to determine where they next put down roots. In fact, a Zonda survey shows roughly 25% of baby boomers plan to retire in a location near their grandchildren, a decision that earns them the name "baby chasers." Migration trends are important to understand as they fuel housing demand, and our third annual Zonda Baby Chaser Index captures just that.

The Zonda Baby Chaser Index considers longer-term migration patterns as well as current trends for both demographic cohorts. While the latest migration data used in the index captures trends pre-COVID-19, we believe the virus will only exaggerate these patterns.

The index shows:

  • Charlotte, North Carolina, regained its position as the top baby chaser market after falling to No. 2 last year
  • Phoenix, the No. 3 baby chaser market in 2020, didn’t make the list in 2018 and moved up from No. 5 last year
  • This year’s index brings three new markets to the top 10: Indianapolis, San Antonio, and Atlanta

“I’m not surprised to see Charlotte, Austin, and Phoenix top the list as all three are great relocation markets for millennials," says Tim Sullivan, Zonda's senior managing principal of advisory, who travels across the country working on new-home projects. “These markets also allow many baby boomers to live a classic retirement consisting of downsizing their home, saving some money, being near their family, and, in some cases, having a better quality of life.”

Charlotte Checks All the Boxes
Similar to prior years, the Southeast and Southwest continue to be the most desirable locations for baby chasers. Many of the top markets have commonalities including diversified economies, either an established or growing tech presence, desirable weather, and relatively affordable new housing. This year’s top-ranking metro, Charlotte, checks all those boxes.

Charlotte offers job opportunities across industries and is home to Bank of America, Truist, Belk, Lowe's, and Honeywell, among others. Furthermore, a favorable tax environment, increasing entertainment opportunities, and being geographically close to both the mountains and the beaches makes Charlotte a magnet for new growth.

Shaun McCutcheon, Zonda’s vice president of advisory in the Southeast, says: “Charlotte is a hot spot for baby chasers because of all the aforementioned reasons plus the diversity of the housing stock.” He explains that Charlotte offers low-end and high-end standard homes as well as low-end and high-end active adult communities, which enables those moving from the Midwest and California alike to be happy with their choices. “There are housing options that range from starter homes in the $200,000s to lakefront properties that can be found for around $1 million, the latter of which would be five times that price in other markets.”

McCutcheon himself is a real-life example of this index. He relocated to Charlotte from San Diego in the middle of 2016, and just one year later his parents left their home of 40 years and moved across the country to North Carolina, primarily because they wanted to be near their only granddaughter. When asked why he moved, McCutcheon explains that after visiting all different major metros in the country, he felt Charlotte provided the highest quality of life for the lowest price.

Tech, Climate, and Some Character Drive Austin
Austin, the runner-up for the Baby Chaser Index, boasts one of the fastest-growing tech economies in the nation, home to a variety of startups as well as significant employment centers for Amazon, Apple, Google, Facebook, and soon Tesla’s Gigafactory Texas. Tech employment underpins a diverse market that attracts younger employees from across the country. For fun, Austin’s good weather and hilly terrain sets the stage for residents to enjoy hiking and biking as well as water activities downtown and at nearby Lake Travis. Live music, though temporarily impacted by COVID-19, and diverse dining options add to the appeal.

Given the strong migration patterns, it is no surprise that Austin’s housing market continues to impress, even amid a nationwide housing boom. The Zonda New Home Pending Sales Index shows a 54.9% year-over-year increase in contract sales in September for Austin. Vaike O’Grady, Zonda's regional director in Austin, says she does not see demand slowing down anytime soon. “Parents and grandparents want to follow their kids and grandkids, and the combination of a temperate climate and lifestyle make it an easy decision to move here." she says. "Within the metro, shoppers can find a variety of single-family detached homes, active adult communities, and condos for all income levels. There’s an attention to neighborhood-level design, and that adds character and charm.”

As mentioned, we believe the COVID-19 pandemic has only exaggerated moving trends. Zonda's top baby chaser markets have gained steam since the start of the pandemic as the work-from-anywhere shift allows some freedom to where people live. Moving forward, the biggest concern will be how builders can keep pace on supply with how quickly demand is shifting.