Buyers still put location, location, location at the top of their wish lists. But these days high housing costs are influencing what a “good” location means. Redfin has found that moves out of town remain popular due to the search for where affordability is greatest.
Evidence for the trend is seen in the numbers with searches for out-of-town locations dropping 4.2% in the first quarter from a year ago, but far smaller than the 15.6% drop for searches closer to home.
But another Redfin stat suggests that the pandemic-era migration trend may be starting to cool. It noted that these are the biggest drops in the company’s records, which date back through 2019.
Many reasons are driving buyers to pack their belongings, call the moving company and head to distant locations. High mortgage rates pushing up monthly costs make lower-cost living areas much more appealing—cheaper groceries, less expensive recreation, better gasoline prices, more affordable entertainment of movies and restaurants, and on and on. In many locales, housing prices may have gone up but are still far less than in others, which is a huge incentive. There’s also better weather, which can lower heating costs (though up cooling). And the ability to work flexible schedules and often from home has also fueled the interest in going possibly for more space, indoors and outdoors, without paying more. Among the most popular places to head are Phoenix, Las Vegas and parts of Florida.
In California, once a magnet for relocation, is seeing homeowners leave for places like Las Vegas. “Las Vegas attracts a lot of homebuyers from California, Hawaii, Washington State and other expensive western places,” said Las Vegas Redfin agent Shay Stein. “For most of these buyers, it’s all about affordability.” Such locations like that have no state income tax, very low property taxes and an overall low cost of living.
Buyers also looked to leave San Francisco, New York and Los Angeles more than any other major metro in the first quarter, followed by other pricey markets of Washington, D.C. and Boston.
Where else are some going? To the Sunbelt, with Miami, Phoenix, Las Vegas, Tampa and Orlando cited in the Redfin.com report as the most popular destinations for those searching on its site in the first quarter. Example of affordability in a place like Las Vegas is reflected in a typical $400,000 house, about half the cost of the $820,000 median one in Los Angeles. But prices change, too, and houses in Vegas are more expensive than before the pandemic, but that’s true in many markets.