AgentReal EstateResearch

Interest in relocation cooling, but still above pre-pandemic levels

Homebuyers are leaving coastal cities and are headed for the sunbelt

Interest in relocation fell for the second-straight quarter, hitting its lowest point since 2020, according to a new Redfin report released Friday.

After hitting a peak of 31.5% at the start of the year, only 30.2% of Redfin users were looking to move metropolitan areas in the third quarter of 2021. This is down from 31.1% in Q2 2021, but still higher than a year ago when 29.2% of people were looking to relocate. It is also still markedly higher than the roughly 26% of homebuyers looking to relocate pre-pandemic.

Although interest in relocation has dropped over the past few months, the slowdown is along the lines of typical seasonal trends and coincides with a dropping bidding-war rate and a drop in the pending home sales.

“We expect Americans to continue relocating at a higher rate than they did before the coronavirus pandemic,” Redfin deputy chief economist Taylor Marr said in a statement. “As employers fight to retain talent during the ongoing labor shortage, they’ll face mounting pressure to introduce permanent flexible-work policies that will give more workers the option to move where they want. We’re also starting to see a resurgence in demand for vacation homes, which could help sustain the relatively high rate of house hunters searching outside their home metro.” 

The metro areas with the largest net inflows included Miami (32.3%), Phoenix (35.1%), Sacramento (41.7%), Las Vegas (41.3%) and Tampa (46.1%). Miami had the greatest net inflow with 11,872 people moving to the area in the third quarter of 2021, with the top origin for this homebuyers being New York City.

Las Vegas and Sacramento both saw drops in the number of homebuyers moving in from another metro compared to a year ago.

“We’re not seeing as many buyers in Sacramento as we were at the height of the pandemic, but most of the buyers I do work with are still coming from the Bay Area,” Sacramento-based Redfin real estate agent Dawn Marie Brown said in a statement. “Remote work has become the norm for a lot of people—especially Silicon Valley tech workers—so they’re moving here to take advantage of the scenic countryside and high-quality schools.”

While much of the Sacramento metro area remains in high demand, Pollock Pines and Pleasant Valley which were impacted by the Caldor Fires are less popular with buyers. However, Brown believes that the demand will rebound once memories of the fires are not as fresh.

On the other side of things, the top metro areas people are looking to leave are San Francisco, Los Angeles, New York and Boston. However, New York saw a lower net outflow in Q3 2021 (30,384 Redfin users) than in the same time period a year ago (48,233 Redfin users). The same is true for two other cites in the top 10 metros people are leaving, Chicago and Denver.

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