With home prices up 16% from a year ago and mortgage rates rising, many Americans are searching for homes in more affordable areas
(NASDAQ: RDFN) —Nearly one-third (32.3%) of Redfin.com users looked to relocate in January and February, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s up from 31.5% in the first quarter of 2021 and up significantly from 26% in 2019, before the pandemic began.
Homebuyers are relocating at a record rate largely because remote work is allowing many Americans the freedom to live in relatively affordable areas, with metros like Miami and Phoenix topping the list of places people are moving to. With U.S. home prices up 16% year over year in February and mortgage rates jumping from last year’s record lows, many homebuyers are priced out of their local markets. One of the only options is relocating to a more affordable area, particularly for first-time buyers who aren’t able to use proceeds from selling one home to buy another.
“Phoenix is a hotspot for out-of-town homebuyers. Some of them are relocating permanently, some are buying vacation homes and some are investors who turn the homes into rentals,” said Phoenix Redfin agent Heather Mahmood-Corley. “I recently worked with a young couple that’s turning their Seattle condo into a rental and moving to Phoenix because they can work remotely and afford a single-family home here.”
“As for the investors, it’s not just corporations coming to Phoenix—it’s individuals, too,” Mahmood-Corley continued. “They realize they can buy three rental properties here for the price of one in San Francisco. It’s a side hustle for some and a retirement plan for others.”
Buyers are flocking to Miami, Phoenix and Tampa
Miami was the most popular destination for homebuyers looking to relocate in January and February, unchanged from the second half of 2021. That’s measured by net inflow, or how many more Redfin.com users looked to move into an area than leave.
Next came Phoenix, Tampa, FL, Sacramento, CA and Las Vegas, NV. Sunny, relatively affordable metro areas perennially top the list of places homebuyers are looking to move. The trend has grown even stronger over the last year as remote work has become permanent for many Americans. Net inflow increased from last year in four of the top five destinations (Las Vegas is the exception).
“With out-of-towners driving up home prices in Phoenix, a lot of local first-time buyers have bowed out of the market,” Mahmood-Corley said. “They just don’t have the cash to compete, especially when there’s such limited inventory. Oftentimes, the only homes that are both available and affordable are too far out of town for them.”
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Top 10 Metros by Net Inflow of Users and Their Top Origins
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Rank
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Metro*
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Net Inflow, January and February 2022†
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Net Inflow, January and February 2021
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Portion of Searches from Users Outside the Metro, January and February 2022
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Portion of Searches from Users Outside the Metro, January and February 2021
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Top Origin
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Top Out-of-State Origin
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1
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Miami, FL
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13,835
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7,503
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34.5%
|
32.0%
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New York, NY
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New York, NY
|
|
2
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Phoenix, AZ
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12,501
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10,455
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38.1%
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38.9%
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Los Angeles, CA
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Los Angeles, CA
|
|
3
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Tampa, FL
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9,052
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6,003
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50.0%
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60.2%
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Orlando, FL
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Washington, DC
|
|
4
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Sacramento, CA
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7,936
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7,184
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42.4%
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48.0%
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San Francisco, CA
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Seattle, WA
|
|
5
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Las Vegas, NV
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7,911
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9,094
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44.2%
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53.1%
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Los Angeles, CA
|
Los Angeles, CA
|
|
6
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Cape Coral, FL
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6,620
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5,631
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67.3%
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76.8%
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Chicago, IL
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Chicago, IL
|
|
7
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North Port, FL
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5,970
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3,976
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66.4%
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79.5%
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Chicago, IL
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Chicago, IL
|
|
8
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Dallas, TX
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5,429
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7,790
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25.9%
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33.3%
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Los Angeles, CA
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Los Angeles, CA
|
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9
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San Antonio, TX
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5,373
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3,238
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44.7%
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48.2%
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Austin, TX
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Los Angeles, CA
|
|
10
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Atlanta, GA
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4,820
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7,403
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20.4%
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26.8%
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New York, NY
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New York, NY
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*Combined statistical areas with at least 500 users in January and February 2022
†Among the two million users sampled for this analysis only
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Buyers are moving away from coastal California and New York
More homebuyers looked to leave San Francisco than any other metro in January and February. That’s measured by net outflow, or how many more Redfin.com users looked to leave an area than move in.
Next came Los Angeles, New York, Washington, D.C. and Seattle. Expensive coastal metros typically top the list of metros homebuyers are looking to leave, a trend that has grown stronger with the pandemic. Significantly more Redfin.com users looked to leave San Francisco, Los Angeles, Washington, D.C. and Seattle in January and February than a year earlier.
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Top 10 Metros by Net Outflow of Users and Their Top Destinations
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Rank
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Metro*
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Net Outflow, January and February 2022†
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Net Outflow, January and February 2021
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Portion of Local Users Searching Elsewhere, January and February 2022
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Portion of Local Users Searching Elsewhere, January and February 2021
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Top Destination
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Top Out-of-State Destination
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1
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San Francisco, CA
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45,463
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35,565
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23.9%
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24.2%
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Sacramento, CA
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Seattle, WA
|
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2
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Los Angeles, CA
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30,999
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23,553
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18.7%
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18.4%
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San Diego, CA
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Phoenix, AZ
|
|
3
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New York, NY
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25,240
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38,104
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27.5%
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34.7%
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Miami, FL
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Miami, FL
|
|
4
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Washington, DC
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21,322
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14,245
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16.9%
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14.7%
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Salisbury, MD
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Salisbury, MD
|
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5
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Seattle, WA
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20,568
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8,490
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18.9%
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16.4%
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Phoenix, AZ
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Phoenix, AZ
|
|
6
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Boston, MA
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11,743
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4,001
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18.9%
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14.9%
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Portland, ME
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Portland, ME
|
|
7
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Chicago, IL
|
8,869
|
8,161
|
14.4%
|
13.7%
|
Cape Coral, FL
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Cape Coral, FL
|
|
8
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Denver, CO
|
4,016
|
6,279
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27.6%
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29.9%
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Chicago, IL
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Chicago, IL
|
|
9
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Portland, OR
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2,444
|
-542
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18.4%
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17.6%
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Seattle, WA
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Seattle, WA
|
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10
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Minneapolis, MN
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2,150
|
-437
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25.2%
|
20.7%
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Chicago, IL
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Chicago, IL
|
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*Combined statistical areas with at least 500 users in January and February 2022
†Among the two million users sampled for this analysis only
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To read the full report, including methodology, please visit: https://www.redfin.com/news/february-2022-housing-migration-trends
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), 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 take an instant cash offer from Redfin or 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 6,000 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.
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