Increased migration to affordable metros causing a housing shortage – Redfin

by Candyd Mendoza21 Oct 2019

More than a quarter of Americans looked to move to another metro in search of more affordable homes in the third quarter, according to a new report.

Redfin’s latest report showed that the national share of home-searchers thinking of relocation hit a new record high at 26% in the third quarter. The search for affordable homes likely drove the increase, according to Redfin Chief Economist Daryl Fairweather.

"Homebuyers are leaving expensive metros for affordable metros and as a result, there are fewer and fewer homes for sale in more affordable parts of the country," Fairweather said.

Boston kicked Phoenix from the top of the list of metro areas with the highest net inflow of Redfin users, which means more people were looking to move in than leave.

Phoenix now sits at number three (6,182 net inflow), while Sacramento ranked in at number two (6,896), and Boston at number one (6,985). Seventeen percent of buyers from other metro areas were searching in Boston in Q3 2019, up 12% annually and 14.1% quarterly.

Meanwhile, New York remained the top origin city for people looking to move to Boston, and Boston is the top destination for people who want to leave New York.

"There is a sense here in New York that the sky has been falling for our housing market all year," said Nick Boniakowski, Redfin’s New York market manager. "People fleeing NYC aren't looking for a rural life, they are fleeing the high costs. Boston presents a slightly more accessible cost of living, while still providing urban quality of life that many desire today. Boston is appealing because it's close and there are similar employment opportunities."

Boston has experienced a boost in housing affordability in the past few years. Lower sales, income, and property taxes in the metro area were likely significant factors attracting people to make the move between New York and Boston.

The report also revealed that six of the top 10 migration destinations have median prices below the national median.

New York (35,120 net outflow), San Francisco (26,988), Los Angeles (17,176), Washington, D.C. (8,681), and Chicago (3,974) rounded out the top five metros Americans most often want to leave in the third quarter.

"In San Francisco, for example, inventory has been rising because there aren't many San Franciscans who can afford the high prices,” Fairweather said. “San Franciscans are moving to Sacramento where homes are much more affordable, and that, combined with a lack of new listings, has caused inventory to decline in Sacramento."