Homeowners becoming less tied to their geography
With a strong economy and healthy job market, homeowners don’t have to feel tied down to one location for long. In fact, many people nowadays seek to move out of the region or state. They’re buying homes in faraway housing markets and having few regrets.
A recent study shows that a growing number of home shoppers are seeking to relocate to faraway housing markets. Migrating to a distant city and planting roots in a fresh but not-as-familiar location seems to be a growing trend.
This is a big step. Moving away from the people and places you know shouldn’t be a hasty decision. But if you do your research carefully and consider future prospects, you’ll reduce the risks involved. Find out more about what’s possible and talk with real estate experts in the market you have your eye on.Ready to buy a home? Discover rates with today's top lenders. (May 26th, 2020)
More people want to move on
A new study by Redfin had some attention-worthy findings:
- One in four home searchers on Redfin sought to move to another metro area in the first quarter of 2019. That’s up from 23% tallied one year ago.
- The national share of home-seekers aiming to relocate is now at its highest level on record, tied with the fourth quarter of 2018.
The top 10 metros by net inflow of users and their top origins were:
- Phoenix (34.5% of searches were from users outside this metro); its top origin city was Los Angeles (market where most people migrated from)
- Sacramento (41.7%), most from San Francisco
- Atlanta (26.2%), most from New York City
- Austin, Texas (31.7%), most from San Francisco
- Miami (28.4%), most from New York City
- Las Vegas (43.1%), most from Los Angeles
- Dallas (24.1%), most from Los Angeles
- Tampa (55.8%), most from New York City
- San Diego (23.8%), most from Los Angeles
- Raleigh, North Carolina (31.1%), most from New York City
The top 10 metros by net outflow of users and their top destinations were:
- New York City (35.0%), most moving to Boston
- San Francisco (21.4%), most moving to Sacramento
- Los Angeles (15.8%), most moving to San Diego
- Washington, DC (11.6%), most moving to Philadelphia
- Chicago (10.1%), most moving to Phoenix
- Denver (24.2%), most moving to Seattle
- Seattle (12.0%), most moving to Los Angeles
- Milwaukee (36.4%), most moving to Chicago
- Detroit (21.6%), most moving to Chicago
- Houston (26.3%), most moving to Austin
People moving away from taxes, high home prices and toward jobs
These results were fairly predictable to Redfin chief economist Daryl Fairweather.
“We’ve been tracking migration for a while, especially the top four destination cities. Most of these metros are the same usual suspects,” she says. “But two cities that surprised us on the list this time around were Miami and Raleigh.”
Here, taxes help tell the tale.
“With the recent tax law changes, if you’re making a lot of money you’re going to pay more in state and local taxes. That’s certainly true in New York and California. New Yorkers and others are likely moving to Miami and Tampa because there is no state income tax in Florida,” notes Fairweather.
The overall trend is obvious.
“People are leaving expensive cities for more affordable ones where homes and the cost of living area cheaper,” she adds. “Some of these costly metros have become very expensive over the past few years. Many have seen double-digit home price increases.”
Folks are also moving on from Rust Belt towns like Detroit and Milwaukee to faraway housing markets like Chicago. That’s less because homes in their last market weren’t affordable and more likely due to better job prospects in other cities.
A strong job market helps
Realtor and real estate attorney Bruce Ailion says the reason why more buyers are opting for faraway housing markets is simple.
“People are able to move with greater ease today because employees are in demand in almost every area. Some jobs are not tied to a physical location. They work remotely,” he says. “Today, people can sell their home and find a job more quickly and easily in a new location.”
Suzanne Hollander is a real estate attorney and Florida International University senior instructor. She agrees that your dollar likely goes further in a more affordable faraway market.
“But maybe technology also plays a role. Perhaps some of the buyers can telecommute to work so they don’t have to suffer a long commute to work. Or maybe public transportation is better in their new metro,” says Hollander.
A checklist to consider before moving far
It’s important to weigh many factors carefully before committing to a long-distance relocation. Ask questions to determine if the cons outweigh the pros:
- What is the employment market and economy like in your desired new metro? What happens if you lose your job?
- How have home values been trending over the last several months and years?
- How long will your commute be?
- Is your location conducive to future needs like raising a family? Can you afford childcare costs?
- Will you get homesick for friends and relatives you’ve left behind? How difficult will it be to visit them?
- How much will you pay in income, state, local and property taxes?
- Can you afford the moving and closing costs? Do you qualify for a desired mortgage?
“It’s a good idea to get to know your chosen faraway metro for at least a few months. Shop around and learn more about neighborhoods you prefer to move to,” suggests Fairweather.
Prepare for your out-of-state move
If you plan to buy right away in your new location, your timing is perfect.
Mortgage rates are low and home finance options are plentiful. Prepare for your big move by getting a pre-approval to buy again when you arrive.Verify your new rate (May 26th, 2020)