Phoenix, Austin and Sacramento were three of the five most popular migration destinations in May, and they’re also among the top five metros with the biggest home-price increases.
Nationwide, 31.4% of Redfin.com users looked to move to a different metro area in April and May, roughly the same share as the first quarter and up from 27% a year earlier. Although the overall housing market is starting to stabilize after a red-hot start to the year, homebuyer interest in relocating remains elevated above pre-pandemic levels and Redfin agents in popular destinations say they’re still seeing an influx of out-of-towners.
Last month, we published a preliminary look at second-quarter migration patterns, which showed that 30.6% of Redfin.com home searchers were looking to move to another metro in April. This report includes data from both April and May.
The latest migration analysis is based on a sample of more than two million Redfin.com users who searched for homes across 87 metro areas in April and May, excluding searches unlikely to precede an actual relocation or home purchase. To be included in this dataset, a Redfin.com user must have viewed at least 10 homes in a particular metro area, and homes in that area must make up at least 80% of the user’s searches. The list of most popular destinations is based on net inflow, a measure of how many more Redfin.com home searchers looked to move into a metro than leave. The list of places people are looking to leave is based on net outflow, a measure of how many more Redfin.com home searchers looked to leave a metro than move in.
Home prices are rising rapidly in the most popular destinations
Relatively affordable areas tend to be the most popular destinations for Redfin.com users looking to relocate, and this month is no exception, with Phoenix, Las Vegas, Sacramento, Austin and Miami topping the list. But as home prices continue to rise at a rapid rate, some of the most popular destinations in the U.S. are quickly becoming less affordable for migrants and locals alike.
In three out of those five metros, the median home-sale price is growing faster than it is nationwide. And with the exception of Las Vegas, prices are higher than the $377,000 national median.
Phoenix, Austin and Sacramento are also among the five metros with the biggest home-price increases in May. Home prices in Austin were up 42.4% year over year in May to $470,000, the biggest increase of the 88 largest U.S. metros. Phoenix, with a 33.3% gain to $400,000, had the second-biggest annual price increase in the U.S., and Sacramento had the fifth-biggest increase.
“People moving into Phoenix from California, Oregon, Washington and even the Midwest are flooding the market, depleting inventory and pushing up prices,” said Phoenix Redfin agent Vincent Shook. “So many people can work remotely from anywhere in the country, so they started looking at Arizona versus a place like Los Angeles or Seattle and thinking, ‘why stay in such a high-priced market when I can get a larger home in Phoenix for a lower price?’ Largely because of those buyers moving in with higher salaries and the ability to easily offer over list price, nearly every home is selling for more than its asking price.”
Prices in Las Vegas (+18.4% to $355,000) and Miami (+24.3% to $409,000) were also up significantly year over year. (Note that year-over-year increases may be exaggerated because the coronavirus pandemic slowed homebuying and selling activity in May 2020.)
Homes in the most popular destinations are still significantly more affordable than the places people are leaving
Still, people moving into places like Austin and Phoenix from expensive coastal areas are paying a much lower price for homes in their new location. A homebuyer could purchase three homes in Austin for the price of one home in San Francisco, or two homes in Phoenix for the price of one in Los Angeles.
In San Francisco, the most common origin for people moving to Austin, the typical home sold for $1.54 million in May, up 2.8% from last year. Though prices are growing comparatively slowly in San Francisco, the price difference is still staggering: The typical home in San Francisco sold for $1,070,000 more than the typical home in Austin in May.
In Los Angeles, the top origin for people relocating to Phoenix and Las Vegas, prices are rising so much that the home-price gap is widening. The typical home in Los Angeles sold for $815,000 in May (up 28.3% year over year), $415,000 more than the typical home in Phoenix. That’s up from a $345,000 gap a year earlier.
“Even though homes in popular destinations are much more expensive than they were a year ago, it’s still well worth it for many people to leave expensive coastal cities in favor of inland metros,” said Redfin Chief Economist Daryl Fairweather. “That’s especially true if they’re working remotely and keeping the same salary. The story is different for locals, many of whom are being priced out of their hometowns.”
Top 10 Metros by Net Inflow of Redfin.com Users and Their Top Origins
|Rank||Metro*||Net Inflow, May 2021†||Net Inflow, May 2020||Portion of Searches from Users Outside the Metro, May 2021||Portion of Searches from Users Outside the Metro, May 2020||Top Origin||Top Out-of-State Origin||Median sale price (Destination; May 2021)||Median sale price, YoY (Destination; May 2021)|
|1||Phoenix, AZ||9,490||7,736||38.5%||35.2%||Los Angeles, CA||Los Angeles, CA||$400,000||33.3%|
|2||Las Vegas, NV||8,984||5,850||53.4%||46.5%||Los Angeles, CA||Los Angeles, CA||$355,000||18.4%|
|3||Sacramento, CA||7,928||6,677||48.8%||45.5%||San Francisco, CA||Reno, NV||$550,000||29.3%|
|4||Austin, TX||7,604||5,385||39.1%||34.8%||San Francisco, CA||San Francisco, CA||$470,000||42.4%|
|5||Miami, FL||7,305||3,381||32.0%||27.3%||New York, NY||New York, NY||$409,000||24.3%|
|6||Dallas, TX||7,239||4,327||32.1%||27.3%||Los Angeles, CA||Los Angeles, CA||$376,000||25.4%|
|7||Atlanta, GA||7,207||5,443||26.9%||26.4%||New York, NY||New York, NY||$325,000||24.5%|
|8||Tampa, FL||6,442||3,887||59.8%||57.7%||Orlando, FL||New York, NY||$300,000||20%|
|9||Orlando, FL||5,470||2,205||58.6%||52.6%||New York, NY||New York, NY||$315,000||14.1%|
|10||Cape Coral, FL||5,439||2,114||77.3%||74.9%||Chicago, IL||Chicago, IL||$320,000||31.1%|
*Combined statistical areas with at least 500 users in April and May 2021
†Negative values indicate a net outflow; among the two million users sampled for this analysis only
Expensive coastal cities are losing residents
Big, expensive cities tend to top the list of places people are leaving, and they typically move to more affordable areas. For instance, Sacramento is the top destination for people leaving San Francisco, and Phoenix is the top destination for people leaving Seattle.
Top 10 Metros by Net Outflow of Redfin.com Users and Their Top Destinations
|Rank||Metro*||Net Outflow, May 2021†||Net Outflow, May 2020||Portion of Local Users Searching Elsewhere, May 2021||Portion of Local Users Searching Elsewhere, May 2020||Top Destination||Top Out-of-State Destination||Median sale price (Origin; May 2021)||Median sale price YoY (Origin; May 2021)|
|1||New York, NY||45,874||25,937||36.5%||35.7%||Boston, MA||Boston, MA||$640,000||12.3%|
|2||San Francisco, CA||32,188||25,038||23.0%||22.3%||Sacramento, CA||Seattle, WA||$1,540,000||2.8%|
|3||Los Angeles, CA||25,845||13,276||19.0%||15.8%||San Diego, CA||Las Vegas, NV||$815,000||28.3%|
|4||Washington, DC||14,932||8,094||15.0%||12.3%||Salisbury, MD||Salisbury, MD||$512,500||16.5%|
|5||Denver, CO||8,587||3,799||31.8%||24.3%||Seattle, WA||Seattle, WA||$532,000||22.3%|
|6||Chicago, IL||5,827||6,124||13.3%||11.5%||Cape Coral, FL||Cape Coral, FL||$316,000||19.2%|
|7||Seattle, WA||5,804||4,080||15.5%||13.2%||Phoenix, AZ||Phoenix, AZ||$738,000||26.1%|
|8||Milwaukee, WI||3,763||1,039||46.9%||36.3%||Chicago, IL||Chicago, IL||$270,000||12.5%|
|9||Boston, MA||3,268||2,815||14.9%||11.8%||Portland, ME||Portland, ME||$625,000||17.9%|
|10||Detroit, MI||2,289||736||26.9%||23.0%||Cleveland, OH||Cleveland, OH||$179,000||32.3%|
*Combined statistical areas with at least 500 users in April and May 2021
†Among the two million users sampled for this analysis only