Homebuyers across the United States are changing their preferences as the housing market undergoes significant shifts. Austin, once a sought-after destination, is witnessing an exodus due to soaring housing costs. At the same time, Sacramento, Las Vegas, and Orlando are emerging as the most popular choices for homebuyers, despite the increasing climate risks they face.
In a surprising turn of events, more homebuyers are looking to leave Austin, Texas, than move in during the third quarter of 2023. This marks the first time on record that there hasn't been a net inflow into the Texas capital. The rising housing costs in Austin have prompted some recent transplants to reconsider their decisions and return to their hometowns.
The data analyzed for this report is based on the searches of approximately two million users on Redfin, who viewed homes for sale online across over 100 metropolitan areas from July 2023 to September 2023. Redfin's records trace housing trends dating back to 2017.
U.S. Homebuyers' Nationwide Relocation
Nationwide, there is a significant trend of homebuyers relocating to different metro areas, which is still near record highs. During the third quarter, approximately 25.9% of homebuyers sought to move to a different part of the country. This figure remains relatively consistent with the record high of 26% observed in August. It's also up from 24% compared to the previous year and a substantial increase from the 19% reported before the pandemic.
Notably, there is a 9% decrease in Redfin.com users looking to move away from their home metro compared to the previous year, marking the most significant annual drop on record. However, searches for out-of-town homes are holding up better, with a 17% decrease in Redfin.com users searching within their home metro compared to a year ago.
Despite a cooling overall housing market, the high percentage of homebuyers looking to move to a different metro area continues, largely due to the pursuit of affordability. In fact, nine out of the top 10 most popular migration destinations offer lower home prices than the most common origin of buyers moving in.
Homebuyers' Migration to Affordable yet Climate-Risky Destinations
Sacramento, California, Las Vegas, Nevada, and Orlando, Florida, have emerged as the most sought-after destinations for relocating homebuyers in the third quarter of 2023. The popularity is determined by a net inflow, which measures how many more Redfin.com users looked to move into an area rather than leave it.
Remarkably, half of the top 10 popular destinations are in Florida, and eight of them are situated on the East Coast, even though the two most popular destinations are in the western part of the U.S. What's fascinating is that nearly all the places homebuyers are moving to are more affordable than their places of origin, which explains their popularity, even in the face of increasing climate risks.
Top 10 Metros Homebuyers Are Moving Into, by Net Inflow
Let's take a closer look at the top 10 metro areas that homebuyers are flocking to, based on net inflow, in the third quarter of 2023:
- Sacramento, CA: With a net inflow of 4,800, Sacramento takes the top spot, attracting homebuyers primarily from San Francisco, CA, and Chicago, IL.
- Las Vegas, NV: Las Vegas follows closely with a net inflow of 4,500, drawing homebuyers primarily from Los Angeles, CA, and retaining a strong local presence.
- Orlando, FL: Orlando secures the third position with a net inflow of 4,000, primarily from New York, NY.
- Myrtle Beach, SC: With a net inflow of 3,800, Myrtle Beach entices homebuyers from Washington, D.C., and maintains its local appeal.
- North Port-Sarasota, FL: This destination reports a net inflow of 3,700, with most homebuyers coming from New York, NY.
- Portland, ME: Portland, ME, attracts homebuyers with a net inflow of 3,500, primarily from Boston, MA.
- Tampa, FL: Tampa, FL, showcases a net inflow of 3,400, with New York, NY, as its primary source of homebuyers.
- Cape Coral, FL: Cape Coral, FL, with a net inflow of 3,300, draws homebuyers primarily from Chicago, IL.
- Miami, FL: Miami, FL, reports a net inflow of 3,200, with New York, NY, as its primary source of homebuyers.
- Salisbury, MD: Salisbury, MD, rounds out the top 10 with a net inflow of 3,100, primarily attracting homebuyers from Washington, D.C.
In summary, the U.S. housing market is undergoing a transformation as homebuyers seek new opportunities and prioritize affordability. Austin, once a bustling destination, is witnessing a surprising exodus due to escalating housing costs. In contrast, Sacramento, Las Vegas, and Orlando are experiencing a surge in popularity, despite the climate risks they face.
These trends are reflective of a changing landscape, where Americans are making calculated moves to secure their dream homes in the most promising locations. These shifts provide valuable insights into the evolving housing market, allowing both homebuyers and sellers to navigate the changing tide with confidence.