The search for attainable, affordable areas to live is contributing to more than 25% of house hunters looking for homes in different parts of the country. According to research from Redfin, house hunters are favoring cities such as Phoenix, Las Vegas, and Miami as relocation destinations due to relative affordability compared with coastal cities such as San Francisco and New York.
Despite a record share of house hunters looking to relocate, the number of buyers looking to relocate to a new metro is down 7% from a year ago, as elevated mortgage rates continue to push more Americans out of the home buying market altogether. The number of out-of-town shoppers is holding up relative to in-town buyers, though, with the number of buyers looking to move within their current metro area down a record 18%, according to Redfin.
Sun Belt is Popular Relocation Destination
Phoenix is the most popular destination for buyers looking to move to a different part of the country, followed by Las Vegas, and multiple Florida metros (Miami, Tampa, Orlando, North Port-Sarasota, and Cape Coral). Redfin calculated popularity by net inflow, a measure of how many more shoppers looked to move into an area than leave the area.
Sun Belt metros are popular relocation destinations due to their relative affordability compared with many other parts of the U.S. The typical home in Phoenix is priced at $450,000. That amount is well below the median price of $800,000 for a typical home in Seattle, which is the most common origin of people moving to Phoenix.
Redfin notes the attractiveness of Phoenix as a relocation destination has not been impacted by the worsening drought and heat risk in the metro. The state of Arizona recently said it will stop issuing home building permits in some parts of the Phoenix desert, because migration to the area and extensive development is straining water resources. Relocation destinations in Florida face similar climate risks: many areas are susceptible to flooding.
“Climate risks haven’t yet stopped many home buyers from moving into areas that don’t have enough water, like Phoenix, and places that could eventually be underwater, like coastal Florida,” says Redfin chief economist Daryl Fairweather. “That’s because even though Sun Belt home prices soared during the pandemic, those metros remain a bargain for people relocating from expensive coastal cities.”
Buyers Flee High-Cost Metros for Beach Towns
More buyers are looking to move away from San Francisco, New York, and Los Angeles than any other metro. Out-migration from these metros was accelerated by remote work capabilities, but the high housing costs caused many homeowners to leave expensive coastal metros for more affordable markets even before the onset of the pandemic. The most popular destinations for buyers leaving these metros are Las Vegas and Miami, according to Redfin.
According to Redfin, smaller vacation areas now top the list of most popular destinations for people leaving Washington, D.C., and Boston. Buyers are most commonly leaving Boston for Portland, Maine, while buyers are fleeing Washington, D.C., for the Salisbury, Maryland metro, which includes beach towns such as Bethany Beach, Delaware and Ocean City, Maryland. The typical Salisbury home sells for $245,000, significantly lower than the typical sales price of $560,000 in Washington, D.C.