The American coasts are draining thanks to the high cost of living and rising mortgage rates, feeding a migration of people that is poised to change the map of trendy places to live in the future.
This is where cities like Sacramento, Atlanta, Phoenix (and even Detroit?) could end up becoming major venues for those looking for a new, affordable life.
According to Redfin data, the third quarter of this year saw the migration continue, with people relinquishing their emotional and fashionable hold on cities such as San Francisco, New York, Los Angeles and Washington, D.C. and moving to new metro areas.
A sample of more than 1 million Redfin.com users searched for homes across 80 cities from July through September this year. One-quarter of users sought to move to another metro area in the most recent quarter—up from 22 percent during the same period last year.
“Rising mortgage rates are exacerbating affordability issues that have been driving people out of expensive coastal metros for the past few years,” said Redfin chief economist Daryl Fairweather. “With rates no longer near historic lows, buyers are increasingly cost-conscious, seeking more affordable homes in low-tax states in the South and middle of the country.”
Topping the list of venues Americans are looking to escape are San Francisco, New York, Los Angeles, Washington, D.C. and Denver.
Among RedFin users, over 28,000 sought to leave San Francisco for good, while over 23,000 sought to escape from high-cost New York. Related: Chinese Gold Demand On The Rise
In terms of new boom-time cities, Sacramento is on the top of Redfin’s list for over 42 percent of users surveyed. Atlanta came in at No. 2, followed by Phoenix, Portland, San Diego, Miami, Austin, Tampa, Dallas, and Nashville.
Some 40 million Americans move at least once, every year. That’s around 14 percent of the entire U.S. population, according to USA Today. And while the data is skewed to include young people moving within cities, there is a growing trend to seek out more affordable venues, better job opportunities and—in some cases—warmer climates.
Between 2010 and 2017, the biggest destination cities for relocations were in states such as Florida, Texas and Arizona—based on census figures that line up with what Redfin data is showing.
Forbes notes that smaller cities—with fewer than 1 million people—are starting to figure in the migration trend, too. The trend since 2012 is for mid-sized cities to experience increases in net migration, while major metro areas experience decreases.
Making its point, Forbes notes that last year alone, New York and Los Angeles lost 209,000 people.
Realtor.com is plugging Spokane, WA as the best place to be, based on the fact that no one wants to leave, and it’s becoming a hot destination for those looking to see their dollars stretch a lot farther.
The average home price in Spokane is around $290,000—compared to Seattle’s $555,000, according to Realtor.com. If Spokane isn’t speaking to you, the next on Realtor.com’s affordability list is Deltona, Florida, with average metro-area home prices at $287,350, following by Portland, Charleston and Boise.
The online real estate website said its data showed that nearly 84 percent of residents in Silicon Valley’s San Jose area were looking for an escape, with median home prices nearing $1.1 million.
Ok, so Detroit didn’t make Redfin’s Top 10 list—or anyone else’s, for that matter—but if the trend continues, maybe someday. It doesn’t get much more affordable than Detroit, but there’s a reason for that.
There has been a bit of a revival in the downtown area, along with an “influx of affluent residents and large-scale developments”, with 10,000 new residents setting up house in the greater downtown area since 2010.
But on the flip side, the city has lost 35,000 residents in that same time period, according to Moody’s, which notes that the “citywide population is declining and per-capita income is just above 52 percent of the nation”.
By Fred Dunkley for Safehaven.com
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