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More and More Flocking to the Sunshine State

According to a new report from Redfin, Miami, Sacramento, Phoenix, Las Vegas, and Tampa were the most popular migration destinations based on net inflow among major U.S. metros in July. Redfin defines “net inflow” as a measure of how many more Redfin.com home searchers looked to move into a metro than leave.

The analysis is based on a sample of approximately two million Redfin.com users who searched for homes across 112 metro areas in July, excluding searches unlikely to precede an actual relocation or home purchase. Miami has consistently made the top 10 list since quarterly migration has been tracked in 2017, but has never taken the number-one spot until now. It had a net inflow of 7,610 Redfin.com users in July, more than triple the 2,216 it saw a year earlier. Two other Florida metros—Tampa and Cape Coral—were also in the top 10 last month and experienced year-over-year increases in net inflow.

"Miami has always been a melting pot, but the pandemic has brought even more out-of-towners to the area because so many people can now work from wherever they want. Homebuyers are moving here from all over the map—Atlanta, Cincinnati, New York, Columbia, Mexico City, Pittsburgh and Philly, to name a few," said Miami Redfin Real Estate Agent Milagros Alvarez. "The beaches, warm weather and low taxes are the major draws. Florida has also been much less shut down than other states during the pandemic, which some house hunters see as a positive."

On the negative side to a Miami migration, 59% of Miami's properties face some level of climate concerns, including high flood risk, according to First Street Foundation's Flood Factor. Sea levels in Miami-Dade County are projected to rise two feet or more by 2060, threatening to displace many residents. The region also faces extreme heat risk.

"Many people who move to Miami are thinking about the short-term benefits of living in such a vibrant, beautiful and prosperous city," said Redfin Chief Economist Daryl Fairweather. "We know from the recent UN climate report that places like Miami will see the impacts of climate change within the next 30 years. Miami homebuyers should think about how they can make their homes more resilient to climate change, and how their finances would be impacted if their homes lost value."

The areas Redfin found where most were exiting from include San Francisco, Los Angeles, New York, Washington, D.C., and Boston which all recorded the biggest net outflows in July. A “net outflow” is a measure of how many more Redfin.com home searchers looked to leave a metro than move in, out of a sample of two million users. The trend of leaving large metro areas accelerated during the pandemic, as remote work afforded people the flexibility to leave expensive job centers for relatively affordable places.

Nationwide, 29.8% of Redfin.com users looked to move to a different metro in July, down slightly from 31.1% in Q2, but up from 27.8% during the same month last year. As housing demand has increasingly outpaced supply, some of the most popular migration destinations have become prohibitively expensive for homebuyers.

Housing demand continues to outpace supply as more are being forced to reconsider moving at all due to record-high asking prices. Redfin reported the median home price once again hit an all-time high in July, reaching $385,600, a 20% year-over-year spike.

"Home prices are still soaring at an astonishing rate," said Fairweather. "Now that we're a year out from the post-lockdown rebound, we can no longer explain away the enormous price growth by pointing to the pandemic's earliest impacts on the housing market. While this ongoing trend continues to fuel an already severe affordability crisis, the market is becoming somewhat less competitive for homebuyers. Demand has softened enough that homes aren't flying off the market quite as fast or for as much above list price as they were in the spring. Mortgage rates are remaining about as low as they've ever been, so buyers who lose out in a bidding war don't have to fear that they've missed their window to buy. As more homes are being listed, it may be worth waiting for the right home at the right price."

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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