The interest in relocating to a new metro area remains strong among home hunters, if down slightly month-over-month, with some 31% of Redfin.com users in April and May looking to migrate to a new city, according to the real estate brokerage's latest data. Those stats are about the same as Redfin charted in the first quarter of 2021 but still elevated from the same period in 2020 by 27%.
As Redfin reported earlier in the quarter, small montly declines could indicate a slowdown in the yearlong surge of people moving from one metro to another, but it could also just be a blip before things pick back up.
"The dust has not settled, as there are still a lot of unknowns about what portion of workers will return to the office and how many will pick up and move because they finally have clarity from their employers about whether or how often they can work remotely," Redfin Chief Economist Daryl Fairweather said at the end of May. "Once people know more about their future, we could see another big wave of migration ..."
At this point, the cities that people are migrating to—Phoenix, Austin, Sacremento, Austin, Miami—also are the metros with the fastest rise in home prices. So at the current rate, some of the most popular destinations in the U.S. are quickly becoming less affordable for migrants and locals alike, Redfin reports.
In three out of those five metros, the median home-sale price is growing faster than it is nationwide. And with the exception of Las Vegas, prices are higher than the $377,000 national median.
"Even though homes in popular destinations are much more expensive than they were a year ago, it's still well worth it for many people to leave expensive coastal cities in favor of inland metros," Fairweather said. "That's especially true if they're working remotely and keeping the same salary. The story is different for locals, many of whom are being priced out of their hometowns."
Homeowners are exiting the more expensive coastal cities including New York, San Francisco, Los Angeles, Washington, D.C. and Denver—those are the places Redfin.com users most commonly looked to leave in May, Redfin reports.
The folks leaving those cities tend to move to more affordable areas. For instance, Sacramento is the top destination for people leaving San Francisco, and Phoenix is the top destination for people leaving Seattle, Redfin reported.
Agents in highly desirable destinations say they’re still seeing the influx of out-of-towners that seemed spurred early on by the coronavirus pandemic and more remote-work options.
"People moving into Phoenix from California, Oregon, Washington and even the Midwest are flooding the market, depleting inventory and pushing up prices," said Phoenix real estate agent Vincent Shook. "So many people can work remotely from anywhere in the country, so they started looking at Arizona versus a place like Los Angeles or Seattle and thinking, ‘why stay in such a high-priced market when I can get a larger home in Phoenix for a lower price?’ Largely because of those buyers moving in with higher salaries and the ability to easily offer over list price, nearly every home is selling for more than its asking price."
The entire Redfin report for Q2 2020 is available at Redfin.com.