Well, that was predictable.
The higher cost of housing has motivated a record-high percentage of Redfin.com users to move to more affordable metros – away from some of the most expensive cities in the U.S.
Those still searching for a home are looking at popular (and often sunnier) metro areas with lower housing costs.
More people than ever move to more affordable metros
Nearly a third of Redfin.com users looked to move from one metro area to another in the second quarter of 2022.
The actual percentage is 32.6% – a record high. It is slightly more than the 32.3% from Q1 and significantly more than the 26% from before the pandemic.
Reasons for the move are varied but generally come down to the following:
- Higher cost of housing in the area
- Higher mortgage rates pricing many buyers out of the market
- Increased prevalence of remote work as a permanent option
Higher housing costs put some metros further out of reach
The cost of housing is just one factor driving many away from expensive metro areas like San Francisco and San Jose, where the average home costs more than $1.5 million. Higher mortgage rates also contribute to housing affordability.
Many looking to move are assessing the cost of buying a home in today’s market and searching for areas where the cost of living is more reasonable.
Areas like Tampa and San Antonio look far more attractive to buyers willing and able to move.
With remote work, people can live where they want
With more people having the option of permanent remote work, it’s no surprise they’re deciding to move away from pricier metro areas when comparable homes in more affordable metros offer an immediate upgrade to their standard of living.
The Redfin survey measured net outflow: the number of Redfin.com users leaving minus those moving in. The net outflow has increased in four of the five top metros people are leaving – San Francisco, Los Angeles, New York, Washington D.C., and Seattle.
Florida is seeing more buyers moving in than a year ago
Migration into Florida metro areas continues to increase, with net inflows for Miami, Tampa, Cape Coral, and North Port higher than a year ago. New York and Chicago are the most common origins for buyers moving into these areas.
Metros in the sun belt with lower housing prices are particularly attractive to buyers moving from higher-priced northern metros, where property taxes are also higher.
What does this mean for real estate agents?
If you’re a real estate professional working in one of the areas seeing an increased in-flow of new residents, your number of prospects is growing. Houses in the area will likely see more offers from interested buyers looking to move out of more expensive metros.
Residents currently renting in your area are also potential clients, since many may have recently moved from locations where their rent payment swallowed too much of their income.
If, on the other hand, you’re working in an area seeing an increased outflow of residents, you can still help clients in a number of ways:
- Help sellers set a realistic asking price for their properties
- Refer clients who are moving to a reputable agent in their new destination
- Helping renters find homes with mortgage payments equal to or less than their rents
Whether you are in a metro experiencing outflows, inflows, or somewhere in between, plenty of deals will take place this year. What are you doing to make yourself stand out in your market?