Homebuyer Migration Patterns Are Changing Again in 2021

As more people are vaccinated and the economy improves, many companies are expecting employees to return to their office. This may be shifting homebuyers’ location choices once again, according to Archana Pradhan, a principal, economist, at CoreLogic, in a recent blog.

The pandemic has influenced homebuyers’ decision on where to buy a home. Previous analysis showed that homebuyers who relocated to another metro in 2020 were often choosing areas that were either adjacent to their current location, had a lower cost of living or both. 

Affordability, outdoor amenities, and job opportunities have always been important factors of migration, but their relative importance changed during the pandemic. Remote work reduced the need to live near an employer and allowed families to broaden their home-buying search, while affordability and other external amenities accelerated the homebuyer’s migration rate. 

“Moving forward, as affordability continues to be an important consideration for homebuyers, we are likely to see more applicants buying in less expensive markets in the near future,” Pradhan writes.

“However, as more people return to working in offices in more expensive metros, we also are likely to see some changes in the ratio of homebuyers moving in compared to the number of homebuyers moving out.”

For example, lower OUT/IN ratios in New York, San Jose and San Francisco in 2021 compared with 2020 may indicate that people are slowly returning to the office.

Although homebuyers were considering affordability and proximity while buying homes even before COVID-19, the migration rate grew during the pandemic. With the combination of low inventory, low interest rates and a shift to a more flexible working environment, more people moved out of expensive metros in search of affordability and a different set of outdoor amenities — such as warmer weather, mountain vistas, or lower-density communities –during the pandemic.

However, the ratio dropped in 2021 compared to 2020 in some expensive coastal metros such as New York, San Jose and San Francisco. For example, the ratio for New York was 5.9 in 2020, meaning that for each application to buy in New York by a nonresident, there were about six applications by New Yorkers to buy outside the New York metro area. That ratio decreased to 4.9 in 2021 but remained higher than the pre-pandemic level of 4.3 in 2019.

Los Angeles experienced the highest net out-migration among all the metros from January to July of 2021. New York had the second highest out-migration in this period, followed by San Francisco and San Jose. In 2020, New York experienced the highest net out-migration of homebuyers among all the metros.

The highest-cost metros, such as Los Angeles, San Francisco and New York, lost applicants to more affordable metros nearby. For example, Los Angeles and San Diego had a net loss of potential homebuyers to Riverside, California.

Similarly, New York lost a good share of its potential homebuyers to affordable neighboring metros, such as Philadelphia; Poughkeepsie, N.Y.; Allentown, Penn.; and Bridgeport, Conn., and warmer metros, such as Miami; Atlanta; Charlotte, N.C.; and Tampa, Fla.

Though Miami gained applicants from high-cost areas such as New York and Washington, D.C., Miami residents moved to more cost-friendly Florida metros such as Port St. Lucie, Cape Coral, Jacksonville and Lakeland.