More home seekers than ever looked to move to a new metro area during the first quarter of this year, according to new data from Redfin.
Historically low mortgage rates, coupled with the rise of flexible remote-work policies, have encouraged many would-be buyers to look beyond the borders of their current metro area during the COVID-19 era. This is reflected in the growing share of Redfin.com users who are searching for homes outside their own metro. During the first three months of 2022, this share was at 32.2% — a new record. That’s up from 31.5% in the same quarter last year and up from 26.5% in 2019 prior to the pandemic.
At the start of this year, the trend has been boosted by buyers looking away from expensive coastal areas as the needle for home prices remains pointed upward and rising mortgage rates make affordability even harder to attain. Cities such as San Francisco, Los Angeles, Boston and Seattle, according to Redfin, may be “seeing early signs of a housing-market slowdown” as a result.
Take Seattle, for example — the eighth-most expensive major metropolitan area in the U.S., according to Redfin data, that lags only cities in coastal California. With sky-high prices and a sizable fraction of Seattle’s tech-concentrated workforce able to work from home, the buyer exodus from Seattle has gained substantial steam over the past two years.
The city had a net outflow (the number of Redfin.com users looking to leave minus those looking to move in) of nearly 24,000 residents in first-quarter 2022, up from about 10,000 one year ago and six times higher than in 2020. Its outflow in Q1 2022 was the fifth largest among all U.S. metros.
Compare that to Phoenix, the top target for Redfin users leaving Seattle. As a popular destination for many bargain-seeking buyers from the West Coast, Phoenix has seen its home prices jump considerably in the past 12 months, but its $456,000 median price as of February was still significantly lower than the $750,000 median in Seattle. At slightly more than 14,000, Phoenix had the second-largest net inflow during the first quarter, trailing only Miami.
“I’ve worked with many home sellers recently who are moving to a completely new area,” said Nicole McCormick, a Redfin agent in Seattle. “A lot of them are remote workers – or people who feel confident they’ll be able to get a new job – leaving for sunnier places where they can get more home for their money, like Phoenix or Sacramento.”