Homebuyers Can Still Afford To Move To A Handful Of Sun Belt Hotspots

Settling for second-best has been a choice many homeowners seeking a popular hotspot have had to make after being priced out of such elite markets as Phoenix and Miami.

Areas such as Bakersfield, Virginia Beach and San Antonio are priced below the national median, according to Redfin.

The real estate brokerage reported this week that 32 percent of homebuyers nationwide looked to move to a different metro area in April, close to the all-time high of 32.3% set in the first quarter.

Redfin also included Houston, Jacksonville, Tampa, Atlanta and Cape Coral on its price-attainable list.

Swapping One Expensive Job Center for Another

It’s all about selling in top markets and looking for something comparable, but at a lower price point elsewhere.

Flyhomes agent Jack Kaltreider tells GlobeSt.com that while remote workers are migrating in droves to mostly Sun Belt markets, this reshuffling isn’t just a wholesale exodus from high-priced markets to lower priced ones. 

“Interestingly, home buyers are also swapping one expensive job center for another,” Kaltreider said. For example, the top out-of-state destination for San Francisco (number 1 in net outflows) was Seattle (itself fifth-ranked in net outflows), he said.

Portland (No. 10) also saw the plurality of movers go to Seattle, while the plurality of out-of-state movers from Denver went to Chicago, another high-cost market. 

“Furthermore, if you divide the country into thirds, you see an obvious regional bias at play,” Kaltreider said. “People moving out of state tend to stay in the same third of the country (SF to SEA; SEA to Phoenix; Washington, D.C., to Salisbury, etc.).”

Size Another Factor for Long-Distance Movers

Zillow economist Nicole Bachaud tells GlobeSt.com that during the pandemic, long-distance movers have been seeking out areas with larger, more affordable homes than in previous years. Increased opportunities to work remotely have opened up new possibilities for where many people can live, freeing them to move beyond what would have been a comfortable commute. 

“At the same time, buyers are more interested in homes with an extra bedroom that can be used as an office, or a big backyard for entertaining,” Bachaud said.

“These forces have driven a surge in demand for Sun Belt markets that offer relative affordability, fast-growing economies and weather that allows people to enjoy the outdoors year-round. But that same demand has diminished affordability in these red-hot markets over the past two years, and now they’re attracting fewer people.”

A Zillow analysis of long-distance moving data and local home values shows a growing trend of movers seeking lower priced homes overall and illustrates how a changing affordability landscape is affecting moving dynamics.

“The trend of relocating to a more affordable home has intensified over the course of the pandemic,” according to Zillow’s analysis. 

“The average interstate mover in 2021 moved to a ZIP code where homes were about $35,800 cheaper than where they came from, up from the 2020 comparable average ZIP-level price decline of about $29,500. These moves to savings are much more pronounced than those seen from 2016-2019, when average declines ranged from about $500 to $7,100. 

“But sky-high demand for homes in some of the most popular Sun Belt markets has decreased their relative affordability, and now they’re attracting fewer movers.”

For the first time since the Great Recession, buyers may have an easier time buying a home in the city than in nearby suburbs this home shopping season, Zillow added.

ShowingTime vice president and general manager Michael Lane tells GlobeSt.com that when tracking buyer traffic across the US, there were clear signs in April that rising prices have eased competition.

“However, homes are still selling,” Lane said. “Traditionally, April home showings are on par with March, but this is the first year in which April traffic came in below March in almost every market.”