Where Out of Town Homebuyers are Moving
As companies have allowed their employees to work from home during the pandemic, many workers are deciding to leave high-cost metros for less expensive cities.
As remote workers leave dense cities for new locations, Santa Barbara, CA, Louisville, KY, and Buffalo, NY, are benefiting, according to a new report from Redfin.
Over the last year, the net inflow to Santa Barbara, CA, increased 124%. It was followed by Louisville, KY, (113%) and Buffalo, NY (107%). Other affordable cities, like Tulsa, OK (80%), and El Paso, TX (101%), also appeared on the list.
With the typical home selling for $855,000 in September Santa Barbara, was the expensive outlier. Excluding Santa Barbara, all the metros that have grown the most in popularity have home prices below the national median of $334,000. The typical home in Louisville sold for $229,000 in September, and in Buffalo it was $190,000, according to Redfin
In the third quarter, 29.2% of Redfin.com users looked to move to another metro area, which is the highest share since Redfin started tracking migration at the beginning of 2017. Redfin says the uptick is partly due to the pandemic and the newfound work-from-home culture.
Whether they’re moving to lower-cost cities, the suburbs or even rural areas, the pandemic has expedited an exodus from urban areas. Los Angeles and New York are the number one places Redfin.com users are leaving as they move to the areas growing most in popularity.
Since the pandemic began, San Francisco and New York posted rent declines of 21.7% and 15.3%, respectively, according to the November 2020 New York Rent Report from Apartment List.
“The demand to live in rural and suburban areas is increasing compared to urban demand, which marks a big change from where it’s been,” Jadon Newman, founder and CEO of Noble Capital Group LLC, a private lending and private equity firm told GlobeSt.com in an earlier interview. “But the cost of city living was getting expensive before the pandemic and now the exodus is being expedited.”
Some of these work-from-home shifts could be permanent, which could be giving people the confidence to buy homes in new locations.
S&P Global Market Intelligence’s Digital Pulse survey concluded that pandemic-inspired workplace models will likely stay in place following the pandemic. The survey reports that 69% of companies have found that 75% of their workforce can work remotely without issue. As a result, 64% of companies plan to increase remote work policies following the pandemic, compared to policies in place prior to the pandemic.
Builders and developers are reacting to this migration to less expensive areas. During the pandemic, Idaho, Utah, South Carolina and Arizona have permitted the most new housing units per capita, and Texas and Florida have issued the most housing permits in total, according to research from Porch.