HOUSTON – (By Dale King, Realty News Report) — A survey conducted in January by real estate brokerage Redfin determined that a record 24.9 percent of Redfin home searchers nationwide aim to relocate in a metro area some distance from their current location. Remote work capabilities and elevated housing costs energize their quest for new digs in faraway locations.
That’s up from 24.5 percent in the fourth quarter of 2022, 22.8 percent a year ago and roughly 18 percent before the pandemic.
The Redfin analysis says Miami, Sacramento and Las Vegas are among the most popular destinations.
Actually, Miami was the most sought-after migration location in January, claiming the top spot for the first time since August. Popularity is determined by net inflow, a measure of how many more Redfin users are looking to move into an area rather than leave.
The report says half of the 10 most popular destinations nationally are in Florida: Tampa, Cape Coral, Orlando and North Port-Sarasota are also on the list. But two Texas metros – Houston and Dallas – are also in that top 10 tally.
While Redfin says 7,200 home buyers moved into Miami in January, and 6,200 became Sacramento dwellers that same month and it was a sure bet that 5,700 people bought homes in Las Vegas in January, Dallas became the new home to 4,400 people and Houston was the destination for 3,700 new home residents that same month.
While those numbers seem pretty healthy, all the figures except those for Houston are actually down from net inflow in January 2022. A year ago, 11,400 home buyers moved to Miami, 7,200 relocated to Sacramento, 6,900 made Las Vegas their home and 7,300 made the jump to Dallas.
Houston inflow increased from 2,900 in January 2022 to 3,700 in January 2023, says the Redfin study.
Houston Gained 125,000 in Population in 2022
Houston gained 125,000 in population in 2022, second-highest in the nation behind only the Dallas-Fort Worth metroplex, the Census Bureau reported.
“The surge in (Houston’s) population helps to explain last year’s robust job growth, strong demand for housing, and increased congestion on the region’s roads and freeways. Houston added 176,000 jobs, closed on 108,000 single-family homes, absorbed 21,000 apartment units, and delivered 280,000 new vehicles over period covered by the Census data, i.e., the 12 months ending July 1, 2022,” the Greater Houston Partnership said.
The nation’s three largest metro areas, New York, Los Angeles and Chicago, all suffered sizable population losses in 2022, while Houston and Dallas showed strong population gains, according to Census Bureau data.
Impact of Higher Mortgage Rates
High mortgage rates have caused many would-be homebuyers to back out of the market, with overall U.S. home sales down considerably from a year ago, says Redfin. But among those who are buying homes, a record number are relocating. That’s largely due to the ongoing affordability crisis.
The typical monthly housing payment is 26 percent higher than it was in the beginning of 2022. That’s because mortgage rates remain near the 20-year high hit in November and home prices are still up from a year ago despite the cooling market.
Redfin says high housing costs along with the rising price of other goods and services due to inflation make relatively affordable destinations attractive, especially for remote workers with the flexibility to relocate.
While home prices soared last year in many popular migration destinations like Sacramento and Phoenix, those places are now among those where prices are dropping fastest. Plus, they’re much more affordable than the places people are leaving.
Los Angeles, where the typical home sells for about $800,000, was the most common origin for homebuyers moving to Las Vegas and Dallas, both popular destinations where the typical home sells for roughly half of that.
More homebuyers looked to leave San Francisco and Los Angeles than any other U.S. metro in January. Next came New York, Washington, D.C., Chicago and several other major cities. This ranking is determined by net outflow, a measure of how many more people are looking to leave a metro than move in.
Expensive coastal areas are perennially on the list of places people are looking to leave, a trend that has been exacerbated by remote work.
Fewer homebuyers are leaving most of those places than a year earlier, reflecting the slow housing market. The net outflow from seven of the top 10 metros was smaller in the fourth quarter than a year earlier. The slowdown was especially pronounced in Seattle, which had a net outflow of roughly 3,400 in January, down from 19,000.
Homes in Florida certainly aren’t cheap, says Redfin. The typical Miami home sold for $470,000 in January, compared with the $383,000 national median. But they do tend to be less expensive than the places people are coming from.
The typical home in New York, the top origin for homebuyers relocating to Miami, sold for $650,000 in January. Plus, Florida’s overall cost of living is lower because it doesn’t have a state income tax.
“Buyers moving in from places like New York and San Francisco are helping the local market recover from last fall’s housing downturn,” said Fleck. “They’re not nearly as fazed by high mortgage rates because homes here are so much less expensive than their hometowns, and they get larger lots, pools, nice weather and lower taxes.”
April 9, 2023 Realty News Report Copyright 2023
Photo: Ralph Bivins, Realty News Report Copyright 2023
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