Have down payment, will travel
Relocation picked up in 2022, with buyers seeking out more affordable homes in Florida, Texas and California.
- A CoreLogic report found that outbound migration in several markets was higher in 2022 than 2021.
- Expensive coastal cities continued to dominate the list of markets with the highest ratio of outbound to inbound migration.
- Eight of the top 15 markets popular with relocating buyers were in Florida.
The pandemic-fueled relocation trend didn't slow down in 2022. Quite the opposite: Even more buyers departed their high-priced metros compared to 2021, apparently seeking warmer weather and affordability.
Those were the findings from CoreLogic's recent analysis of buyer relocation patterns over the past four years. Of the 15 metros with the highest out/in migration ratios, nine saw a year-over-year increase in outbound migration in 2022, based on home purchase mortgage applications.
The pandemic was a primary catalyst for many moves in 2020 — more buyers suddenly had the option to work remotely, they sought more space, and they were concerned about Covid transmission in densely populated cities — but affordability is the main driver today.
Many workers have returned to offices, but that doesn't appear to be stemming the tide of relocations. As home prices and interest rates have continued to rise, buyers may be more concerned about their bottom line.
Among the top 15 move-out markets, most are expensive coastal cities, and four have led the way since at least 2019: Los Angeles, New York, San Francisco and San Jose.
Inland markets that made the outbound migration list included Chicago, Denver, Salt Lake City and Austin.
Salt Lake City saw a surge in home prices as buyers flooded the area early in the pandemic; those elevated prices now appear to be having the opposite effect. In February, Knock's buyer-seller report ranked Salt Lake City as the No. 1 market for gains in the number of for-sale homes.
Austin is new to the top 15 for 2022. It, too, saw an influx of buyers beginning in 2019 and continuing into 2020. And, like in Salt Lake City, that led to rising prices which have now pushed some would-be buyers out of the market.
Movers continue to have their eyes on Florida
So where are all these buyers headed? As has been the trend, Florida continues to attract a high number of movers. Eight of the top 15 markets for inbound migration were in the Sunshine State, including Lakeland, Jacksonville and Tampa. One notable exception was Miami, which had more outbound than inbound movers.
Metros in other warm-weather areas, including Texas, the Carolinas and inland California, were also popular relocation destinations.
Affordability may continue to drive migration for some time. Record-low interest rates may be gone for good, and continued rate hikes from the Fed are likely to push mortgage rates higher in the near term.
While home values and prices have fallen from their peak levels in June 2022, they remain above pre-pandemic levels, offering limited relief to buyers.
The authors of the CoreLogic report concluded that "we are likely to see more applicants buying in less expensive markets going forward." Unless prices and interest rates drop substantially, relatively affordable markets will continue to be a beacon of hope.