Forget everything you heard about Californian’s moving to Texas and people in the Northeast moving to Florida, new survey says pandemic movers opted for smaller cities within their current state
Well, don’t forget everything you heard. The trend of those moving out of high tax, urban centers is true. According to Erin Sykes, Nest Seekers International’s chief economist, “Despite NYC, London, and other urban cities reopening, Palm Beach’s luxury real estate market continues to heat up. Transactions grew 78% in 2020, and a mere 34 listings were active on the high-end Palm Beach Island in April 2021. The average price in quarter one was $12.8 million, up from $7.5 million in the first quarter of 2020, and 55 listings have sold in quarter one, a 77.5% increase from last year’s first quarter.”
However, the desire for more space and flexibility to work remotely prompted Americans to rethink what they want in a home over the past year. While for some it meant relocating to a different state, nearly six of every 10 pandemic homebuyers opted for a new, often less populated city in the same state, according to a survey by Knock.
According to the survey of more than 2,000 homeowners, the pandemic encouraged younger generations of homeowners to move, a trend that will continue in the coming year. Among those who moved during the pandemic, 58% were either millennials or Gen Z. However, rather than moving across the country, many are choosing less-populated suburban and rural areas in their existing state.
“Almost overnight, our homes took on a whole new meaning. In addition to where we live, they became where we work, go to school, workout and everything in between. It prompted us to re-evaluate what we want and need our home to be,” Knock Co-Founder & CEO Sean Black said. “Although the pandemic may have ignited this trend, it’s not likely to subside anytime soon. People are placing a higher value on where they live, and for many, it means putting where they live ahead of being close to the office, especially now that so many have the ability to work remotely, at least part of the time. It also could mean we will see people moving more often, especially as technology helps to simplify the process of buying and selling homes.”
Pandemic movers sought out less populated areas in their current state
Among those who purchased a home during the pandemic, nearly three-quarters (72%) of pandemic movers went to a new area, with 59% moving to a new city in the same state. Nearly four-in-10 (39%) of these buyers selected a city/town with fewer than 10,000 people.
This is significantly higher than those who moved before the pandemic, with a little over half (54%) reporting they moved to a new area and 41% saying they moved to a new city within the same state. In addition, only 29% of people who purchased their home prior to the pandemic live in a city/town with fewer than 10,000 people.
Southerners led the rest of the country in home purchases during the pandemic. Fifty-one percent of those who moved during the pandemic live in the South, compared to 38% who moved prior to the pandemic. Nearly one-in-five who moved during the pandemic live in either the Midwest (19%) or West (19%) and one-in-10 live in the Northeast (11%).
Who’s moving, to where and why?
Nearly one-quarter (24%) of homeowners surveyed plan to purchase a new home within the next year. Moreover, these homeowners skew younger, with nearly half (49%) being either Gen Z or millennials.
Of those homeowners who plan to move within the next year, the trend toward in-state moves to less populated areas is likely to continue, at least in the short term. More than two-thirds (69%) of homeowners expecting to buy a new home in the next year would like to relocate to a new area, and 43% want to move to a city/town with fewer than 10,000 people.
Millennials and Gen Z will help continue to fuel the shift to smaller towns and cities. Thirty-seven percent of millennials and Gen Z want to buy their next home in a city or town with fewer than 10,000 people. Roughly one-third (32%) of Gen X and one-quarter (25%) of Baby Boomers/Silent Generation future homebuyers feel similarly.
Analyzing longer-term, overall pandemic mover trends, a majority of those considering a move will likely remain in the region where they currently live, with Westerners and Southerners more likely to stay put and Midwesterners and Northeasterners more likely to move.
Eighty-six percent of those currently living in the West and 84% of Southern movers plan to remain in their current region. In the Midwest, 70% plan to stay in the region, while 17% plan to move to the South, 6% plan to move to the West and 1% plan to move to the Northeast. Of those currently living in the Northeast, just over two-thirds (67%) plan to stay in the region, while a quarter plan to move to the South, 6% plan to move to the West and 1% plan to move to the Midwest.
California leads the list of top moving destinations at 12%, followed by Florida (11%) and Texas (9%).
A desire for a larger home (40%), quiet neighborhood (39%) and outdoor space (37%) were the top reasons prompting pandemic movers to choose a new location.