Nearly 29% of Redfin.com Users Searched For Homes Outside Their Area in August

Remote work is accelerating the trend of migration away from expensive places like New York and San Francisco toward relatively affordable inland areas, where out-of-towners are winning bidding wars and driving up home prices.

Nationwide, 28.7% of Redfin.com users looked to move to another metro area in July and August, up from 27.4% in the second quarter and the highest share since we started tracking migration.

Last month, we published a preliminary look at third-quarter migration patterns, which showed that 27.8% of home searchers were looking to move to another metro in July. This report includes data from both July and August.

The national housing market is booming as the coronavirus pandemic changes what people look for in a home, such as more space to work and do schoolwork and bigger yards. Those are also reasons why people are continuing to leave expensive coastal areas like New York, San Francisco and Los Angeles for places like Sacramento and Austin, where homes tend to be more affordable and more spacious.

“People who could barely afford to rent a one- or two-bedroom apartment in New York or San Francisco are finding that with their newly remote job, they can buy a nice sized house in the most desirable part of a place like Sacramento, Tampa or Las Vegas,” said Redfin chief economist Daryl Fairweather. “And their big, coastal city salaries allow them to outbid local homebuyers in bidding wars, which is starting to drive up home prices in those areas. The trend is likely to continue as remote work becomes permanent for more companies.”

About half of all Redfin.com home searches in Sacramento, Tampa and Las Vegas were from out-of-towners. The median Sacramento home price was up 11.4% year over year to $468,000 in August, in line with the 11% national increase, the biggest year-over-year price increase in six years. Prices were up 12.8% to $267,000 in Tampa, and 7.8% to $310,000 in Las Vegas

The latest migration analysis is based on a sample of more than 2 million Redfin.com users who searched for homes across 87 metro areas so far in the third quarter of 2020, excluding searches unlikely to precede an actual relocation or home purchase. To be included in this dataset, a Redfin.com user must have viewed at least 10 homes in a particular metro area, and homes in that area must make up at least 80% of the user’s searches.

Sacramento, Austin and Phoenix are the most popular destinations

Sacramento is the most popular destination for homebuyers looking to move to a different metro area, with more than half of Redfin.com users searching from another area and the biggest net inflow of Redfin.com users in July and August. A net inflow means more people are looking to move in than leave, while a net outflow means more people are looking to leave than move in. 

Austin has moved into second place in terms of net inflow. Although Austin is typically on the top 10 list of most popular destinations, this is the first time it has broken into the top three since Redfin began tracking migration. Sacramento and Austin–like Phoenix, Las Vegas and Atlanta, which round out the top five–are affordable relative to coastal areas, with median home prices under $475,000 in August, compared with $1.5 million in San Francisco and $710,000 in Los Angeles. They’re all also inland areas with warm weather. 

“I’ve seen more and more people moving to Austin from California, New York, Seattle and Chicago, especially since the pandemic began,” said local Redfin agent April Miller. “The influx of people coming from other areas has contributed to an uptick in bidding wars, and most listings with multiple offers go to out-of-town buyers. People are moving in for more affordable homes and lower taxes, and many of them also mention new jobs and a desire to be closer to family.”

In eight of the top 10 most popular destinations, the share of Redfin.com users searching for homes from a different metro area has increased since last year (Atlanta and Charlotte are the exceptions).

Top 10 Metros by Net Inflow of Users and Their Top Origins

RankMetro*Net Inflow†Net Inflow LYPortion of Searches from Users Outside the Metro, July and August 2020Portion of Searches from Users Outside the Metro, July and August 2019Top OriginTop Out-of-State Origin
1Sacramento, CA10,7646,26150.5%44.1%San Francisco, CAReno, NV
2Austin, TX7,0404,07737.8%32.5%San Francisco, CASan Francisco, CA
3Phoenix, AZ7,0395,40934.4%32.4%Los Angeles, CALos Angeles, CA
4Las Vegas, NV6,8605,04248.6%45.3%Los Angeles, CALos Angeles, CA
5Atlanta, GA5,9754,89425.8%26.5%New York, NYNew York, NY
6Dallas, TX5,2502,94129.1%23.8%Los Angeles, CALos Angeles, CA
7Tampa, FL4,1252,81555.4%53.7%Orlando, FLNew York, NY
8Nashville, TN3,8901,87036.8%29.3%New York, NYNew York, NY
9Miami, FL3,3982,22726.1%25.0%New York, NYNew York, NY
10Charlotte, NC3,3612,45039.6%40.2%New York, NYNew York, NY

*Combined statistical areas with at least 500 users in Q3 2020
†Negative values indicate a net outflow; among the 2 million users sampled for this analysis only

People are looking to move away from New York, San Francisco and Los Angeles

New York, San Francisco, Los Angeles, Washington, D.C. and Chicago had the biggest net outflows in July and August, as they did in the second quarter. Expensive coastal areas typically top the list of places Redfin.com users are looking to leave. 

“People are leaving New York City because they want bigger, better homes for the same price, and they can get them outside the city,” said local Redfin agent Ken Wile. “Many people who were living in relatively small $1 million or $2 million apartments no longer need to live close to their office because they’re working remotely, and now they want more space and a separate, quiet space for Zoom calls. Plus, they want to take advantage of low mortgage rates.”

The portion of Redfin.com users in New York looking to move away has declined since last year, but that’s likely because a lot of New Yorkers searching for homes elsewhere have already left the metro, so their search origins reflect their current location.

In San Francisco, 24.2% of local Redfin.com users searched for a home in a different metro area in July and August, up from 21% during the same time period last year. The share of Redfin.com users looking to leave Los Angeles, Washington, D.C. and Chicago has also increased since last year.

Top 10 Metros by Net Outflow of Users and Their Top Destinations

RankMetro*Net Outflow†Net Outflow LYPortion of Local Users Searching Elsewhere, July and August 2020Portion of Local Users Searching Elsewhere, July and August 2019Top DestinationTop Out-of-State Destination
1New York, NY40,03029,75735.3%39.7%Boston, MABoston, MA
2San Francisco, CA36,43623,51524.2%21.0%Sacramento, CASeattle, WA
3Los Angeles, CA18,94914,25716.9%16.1%San Diego, CALas Vegas, NV
4Washington, DC12,4587,51713.6%11.8%Salisbury, MDSalisbury, MD
5Chicago, IL5,5053,98811.9%10.5%South Bend, INSouth Bend, IN
6Denver, CO5,3082,78426.9%23.4%Seattle, WASeattle, WA
7Seattle, WA4,8101,38714.1%11.4%Bellingham, WALos Angeles, CA
8Milwaukee, WI2,06898137.3%39.7%Chicago, ILChicago, IL
9Indianapolis, IN1,41231736.6%29.3%Chicago, ILChicago, IL
10Rockford, IL88834587.4%Chicago, ILMadison, WI

*Combined statistical areas with at least 500 users in Q3 2020
†Among the 2 million users sampled for this analysis only

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