A Record Share of Homebuyers Are Relocating, Many to Places Endangered By Climate Change

Redfin reports Sacramento and Las Vegas, which grapple with extreme heat, are the most popular destinations for relocating homebuyers

(NASDAQ: RDFN) — A record 26% of homebuyers are looking to move to a different part of the country, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s up from 24% a year ago and roughly 19% before the pandemic began.

Elevated mortgage rates have cooled the overall U.S. housing market, with fewer homes for sale and fewer buyers in the market. But a high portion of the homebuyers who are moving are relocating to different metro areas. There are 7% fewer Redfin.com users looking to move away from their home metro than a year ago. That’s compared to a 16.5% decline for those searching within their home metro.

Relocations are holding up better than in-metro moves largely because homebuyers are searching for affordability, and remote work gives many Americans the freedom to move. Nine of the 10 most popular migration destinations have a lower median home-sale price than the most common origin of homebuyers moving in.

Sacramento, CA, for instance, is the most popular destination for relocating homebuyers. The typical home in that metro sells for $575,000, nearly a million dollars less than the typical home in San Francisco ($1,480,000), the most popular origin of buyers moving in. With a 7% mortgage rate–roughly the average for August–the monthly payment for the median-priced Sacramento home is $3,889, compared to $10,010 for the median-priced San Francisco home.

“Half of the buyers I’m working with are moving in from out of town, all but one from the Bay Area,” said Alison Williams, a Redfin Premier agent in Sacramento. “Most of them are moving not necessarily because they can’t afford the Bay Area, but because they want a bigger home and better quality of life. They’re searching for high-end homes with spacious yards where they can raise a family. I’m also working with a few investors who are looking to buy a home here and rent it out for a few years before moving in themselves.”

Sacramento, Las Vegas and Orlando are the most popular migration destinations

After Sacramento, Las Vegas and three Florida metros–Orlando, North Port-Sarasota and Tampa–are the most popular destinations for homebuyers looking to relocate.

Myrtle Beach, SC climbed to #6 after debuting on Redfin’s list of most popular destinations in July at #9. Another Florida metro, Cape Coral, is also in the top 10.

Those metros have a few things in common: They’re more affordable than the most common origin of homebuyers moving in, and they face increasing climate risks. Sacramento and Las Vegas face severe heat risk, Orlando, North Port-Sarasota, Myrtle Beach and Cape Coral face extreme wind/hurricane risk, and Tampa and Cape Coral are at extreme risk of flooding.

While research has shown that homebuyers consider climate risk when deciding where to live, affordability is often a more significant factor. A recent Redfin survey found that roughly 8% of U.S. residents likely to move within the next year are doing so because they’re concerned about the impact of climate change on their previous area, compared with 22% moving for a lower cost of living.

Homebuyers are leaving expensive cities like San Francisco, New York and Los Angeles

Homebuyers are leaving San Francisco, New York and Los Angeles more than any other metro in the country. That’s based on net outflow, a measure of how many more Redfin.com users are looking to leave a metro than move in.

It’s typical for expensive job centers to top the list of places homebuyers are moving away from, as those people seek more affordable housing. Homebuyers leaving Los Angeles, for instance, are most commonly moving to Las Vegas, where homes are half the price.

To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/housing-migration-trends-august-2023

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home in certain markets can have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Customers who buy and sell with Redfin pay a 1% listing fee, subject to minimums, less than half of what brokerages commonly charge. Since launching in 2006, we've saved customers more than $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 5,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230926910799/en/