We’ve seen significant homeowner migration since the pandemic. However, many of these trends started long before anyone had heard of Covid. Many people started moving from the largest metro areas to smaller and mid-sized cities, and it’s been happening across the United States.
Seattle to Portland, Houston to Austin, New York to Raleigh, and Los Angeles to places like Vegas, Boise, Nashville and Phoenix. Homeowners are migrating away from the big cities and rapidly growing other smaller metro areas as a result. The impact in these newly popular destinations is felt on many levels, particularly home and rent prices. As demand for housing in these cities goes up, so do the costs of living.
The interesting part is that home prices were often one of the biggest draws in these alternative markets. People wanted to leave places like Los Angeles because the cost of living is so high—home prices, taxes, food, everything. It makes perfect sense to move away to somewhere that isn’t so expensive, yet still offers some of the metropolitan and suburban amenities these homeowners desire. This includes good job opportunities in growing markets that also attract businesses for the same cost-of-operation reasons.
Changing Job Markets
The rise in remote and hybrid work environments has played a major role in these migrations. This is why the numbers have risen so dramatically since the beginning of the pandemic. People were able to work from home more. They weren’t as tethered to a physical office location in these big cities. They moved to more rural locations or somewhat smaller metro areas. With more hybrid work situations now, there is still some need for workers to be close to a city environment. That’s why these second-tier cities like Salt Lake City, Jacksonville, Augusta, Portland (Maine) and others have grown so significantly in the past decade.
We’ve seen it in our own market, with people moving further away from Philadelphia, DC and New York into our Pennsylvania suburban and rural communities, along with locations throughout New Jersey and Northern Delaware. At the same time, many homeowners in our area have decided to sell and move to less populated locations.
Impact on Home Prices
These homeowner migration patterns have directly affected cost of living in these secondary markets, particularly home prices. For example, the average home price in Nashville went up about 59% between 2015 and February 2020 (just before the pandemic lockdowns). Meanwhile, home prices in Los Angeles increased by approximately 41% during the same period. After even more migration happened during and after the height of the pandemic, average home prices in Nashville have gone up by 47%. This is compared to an increase of only 26% in the Los Angeles market. This data shows how much these migration destinations have been affected by the influx of residents.
Of course, many of these communities have benefited in other ways, such as increased business and job opportunities. And ultimately, secondary migration can occur. Existing residents of these markets may choose to sell and cash out while the prices are so high. They may decide to move to another smaller market, and thus the patterns continue on down the line. Yet, there will always still be high demand for housing in the largest cities. People are moving away looking for greener pastures, but it is a natural cycle as other people want to migrate to the big cities for certain opportunities and lifestyle desires.
Making the Right Real Estate Decisions
If you are considering a move to a new area for any reason, it’s important to study the data and understand the housing trends. This will help you make better home buying and selling decisions, and prepare yourself financially for what may be to come as each of these markets evolves.
For help with all your real estate needs in the Southeastern Pennsylvania or Northern Delaware areas, contact The Cyr Team today. Let us help you make the best decisions when it comes to your home purchase and/or sale.