Migration hits a new high, with Florida a top destination
New data from Redfin finds a record percentage of people are looking to move to another metro area, with affordability playing a bigger role.
Key points:
- 24.6% of Redfin users were looking to move to another area in the fourth quarter.
- Sacramento was the most-searched city, but Florida was a popular destination, with five metro areas landing in the top 10.
- Expensive coastal cities topped the list of areas Redfin users were looking to move away from.
Movers are looking for Florida sunshine — and affordable homes.
The latest Redfin migration report found that nearly a quarter of its users were looking to move to a different metro area in the fourth quarter of 2022 — that's more users than at any time during the pandemic, and a record number since the company began tracking the data.
While factors like remote work are still likely in play, affordability has become a more pressing issue. The report found most of the searches targeted more affordable areas that didn't experience a big spike in home prices earlier in the pandemic.
Based on search volume, the most popular cities for would-be movers were Sacramento, Las Vegas and Miami. At the other end of the spectrum, San Francisco, Los Angeles and New York City had the highest number of users looking to move away.
Sacramento, along with some other cities on the list, has seen prices surge, but Redfin noted that it is still more affordable than the nearby overheated metro areas of San Francisco and San Jose.
Florida continues to have strong appeal, with five metro areas (Miami, Tampa, Cape Coral, Sarasota and Orlando) landing in the top 10 of most-searched areas among buyers who live outside those metros. Florida has consistently topped similar types of lists from other organizations that measured migration in 2022.
The report noted that overall, the number of people looking to move is down, reflecting the slower market. Eight out of the 10 migration destinations had fewer homebuyers looking compared with the previous year, according to the report.
However, those who want to move are more likely than ever to look at other metro areas. The 24.6% of users looking to move to another area in the fourth quarter is up from 22.1% a year earlier and around 18% before the pandemic.
While migration was especially high in the fourth quarter, the trend of moving to more affordable metro areas has been ongoing throughout the pandemic, even when the market was hot, according to data from Freddie Mac.
"The pandemic amplified existing urban de-concentration by threefold from large, expensive metro areas to smaller, more affordable destinations," according to the Freddie Mac report.
More people may be willing to move in pursuit of affordability — but that doesn't mean they'll find a homebuying bargain. A recent affordability report from ATTOM found that in 95% of the largest markets analyzed, it was currently a better deal to rent than to buy, a reversal from a year ago.
Rick Sharga, executive vice president of market intelligence for ATTOM, noted that monthly payments for new homeowners rose around 50% in many markets, making renting a better option even as those payments have also risen.
Even some affordable markets for buyers continue to experience more outflow than inflow. Detroit, for example, where median sale prices are well below national levels at around $72,000 according to Redfin, had double the amount of outflow searches in the fourth quarter of 2022 compared to a year earlier. The most popular city searched for by users in Detroit was nearby Cleveland, where the median sale price is an affordable $115,000.