Labeling it a “surprise,” analysts with John Burns Real Estate Consulting reported Seattle and Portland flipped to outmigration markets for two consecutive quarters, reversing both cities’ patterns of being in-migration markets. Buyers moving to more affordable locations or farther out submarkets were cited as likely causes for the change.
“Never before have space and location been more important,” wrote a trio of researchers from Burns in their report for the firm’s weekly newsletter (“The Light”) covering issues arising from the COVID-19 pandemic. The company routinely tracks the acceleration of moves to exurban communities.
As part of their analysis, representatives from Burns compare U-Haul rental rates between 39 cities to gain insight into migration patterns. According to their findings, the pre-COVID cost to rent a 20-foot truck from Seattle to Austin was $1,446, but it now costs $2,567 more, a spike of nearly 78%.
The researchers compared the average premium or discount to drive a 20-foot truck to a city compared to returning the same truck between October 2020 versus October 2019.
In an earlier report published in May, Burns predicted “The Great American Move” as states, counties, and cities around the country slowly reopened. “For safety reasons, financial prospects, life change improvements, personal comfort, and employment, we expect a surge in household and business relocations over the next few months that will provide new, strategic opportunities for the real estate market.”
The consultants’ latest comparison found most of the outmigration markets were in the coastal states, with all eight California markets experiencing the most outmigration. They noted Riverside-San Bernardino and Sacramento are attracting in-state buyers looking for more space and affordability.
Following the eight California cities with the highest rates of outmigration were New York, Baltimore and Washington, DC, driven in part by retirees and first-time buyers. With the pandemic’s “work from home” mandates and technology enabling productive home-based work, buyers can relocate.
Some such workers are lured to affordable tech markets such as Boise (with a noticeable influx of Northern Californians), Austin, Raleigh-Dunham, and Sale Lake City.
The exodus from expensive areas is benefiting the Coastal Southeast and Florida, as well as the “Big Southern Markets.” The Burns survey found builders are raising prices to accommodate demand, especially in Jacksonville, Myrtle Beach, Charleston, Sarasota, Orlando, and Tampa. The Burns report also named Atlanta, Charlotte, Dallas, Fort Worth, Houston, and Dallas as other attractive destinations for relocating families. Builders in these areas reported strong sales and 7%+ price appreciation in September.
Phoenix, one of the strongest housing markets in the country, continues to be an in-migration magnet in the Southwest. Researchers noted strength in the entry-level segment and “reinvigorated active-adult demand.”
Co-authors for the last migration report were Danielle Nguyen, manager of research, and managing principals Lesley Deutch and Ken Perlman.