Home Prices Soaring in Most Popular Migration Destinations
Phoenix, Dallas, Orlando were 2021’s most popular migration destinations, Redfin reported, but with home prices up roughly 30% there, some locals are getting priced out.
Home prices are becoming a bit pricey for locals or those who relocated to the country’s top migration destinations.
Phoenix was the most popular destination of 2021, followed by Dallas and Orlando, according to a new report from real estate brokerage Redfin.
Redfin estimates the Phoenix metro gained roughly 85,000 residents from other metro areas in 2021, far more than any other metro, while Dallas gained about 56,000 and Orlando gained about 53,000.
The report ranks migration destinations by net inflow, a measure of how many more people moved into a metro area than out. The estimates of net inflows are based on search data from Redfin.com and the U.S. Census Bureau.
Nine of the 10 most popular migration destinations of 2021 are in the Sun Belt, and half had a median home-sale price under the national median of roughly $383,000 in December.
Inflation Highest in Prime Migration Markets
At the same time, the price of goods (inflation), including for homes, also was greatest in those markets, Redfin reported in an earlier report.
Nationwide, 31% of Redfin.com users looked to move to another metro in 2021, up from 25.6% in 2019, before the onset of the pandemic.
Home-price growth was well above the national growth rate (15% year over year) for all 10 of the most popular destinations in December. Similarly, the average growth in rental payments for new leases far outpaced national growth (14%) in seven of the 10 most popular metros.
Remote Work Has Workers on the Move
“Moving across the country is now easier for many Americans, thanks to remote work. That cultural shift is here to stay,” said Redfin Deputy Chief Economist Taylor Marr in prepared remarks.
“What’s changing is the affordability of the most popular destinations. Some locals, particularly renters who aren’t able to take advantage of rising home values, are getting priced out of places like Phoenix and Austin as the cost of housing and other goods and services go up. New construction tends to be robust in sprawling Sun Belt cities, and local governments ought to continue to prioritize building new homes to keep up with ongoing demand.”
Out-of-towners with big budgets are helping fuel rapid price growth in the most popular destinations. In eight of the 10 most popular destinations (the two Florida metros are the exception), the average out-of-towner’s budget was at least 15% higher than the average local’s budget in the first quarter of 2021.