Approximately 32.3% of Redfin users looked to relocate in January and February, according to a new report from Redfin.com —up from 31.5% in Q1 of 2021, and up significantly from 26% in 2019.
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 are unable 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,” said Mahmood-Corley. “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.”
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.”
Consumers are moving away from areas like coastal California and New York, as 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.
To read the full report, including methodology, click here .