MReport September 2022

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M REPORT | 59 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA One-Third of Homeseekers Looking to Migrate People are leaving high-cost cities on the coasts in droves, seeking out warmer climates and cheaper housing. A ccording to Redfin data from 2 million users, the share of homeseek- ers looking to relocate took a big jump in July amid an environment of rising rates as buyers look to more affordable areas where deals can still be had. Before the pandemic, roughly 26% of Redfins users searched for properties outside of their listed metropolitan area—in July, that number hit 33.7%, a new record. The proliferation of remote work has given many Americans a newfound freedom that allows them to prioritize not only affordability but things like the weather as well. According to Redfin, sunny Miami was once again the most popular migration destination in July, the seventh con- secutive month in this position. This was followed by Sacramento and San Diego, California, Tampa, Florida, and Las Vegas, Nevada. "Movement into a few other perennially popular destinations has started to slow, too, even as the overall share of relocators hit a record high," the report said. "Sacramento was the second-most popular destination in July, but there's less movement into the California capital than a year earlier." "And after many months as one of the three most popular destina- tions, Phoenix fell to number 6 in July, with a sizable decline in out-of-town homebuyers look- ing to move there. That's partly because Phoenix home prices rose so much during the pandemic, increasing 20% year over year to $485,000 in June, well above the national median of $428,000." "We've always had a lot of people from the Bay Area and Los Angeles move to San Diego for a better work-life balance and a beachside lifestyle, and it has picked up since remote work became common- place," San Diego Redfin Agent Jodie Lee said. "This year, I've also seen quite a few remote workers move in from places like Seattle and North Carolina be- cause they like the sunny weather and outdoor activities in this area. San Diego also has a big mili- tary presence, and more service mem- bers are relocating here now that the cooling market means they have a better chance of getting an offer with a VA loan accepted." So where are people migrating from? Data shows that homebuyers are leaving expensive cities on either coast in droves with San Francisco being the most popular outflow center. This was followed by Los Angeles, New York City, Washington, D.C., and Boston. Even with high demand, prospective homebuyers pursu- ing affordable housing or access to the great outdoors in one of the featured markets are finding the number of options growing. On average, across the top 20 markets in the index, active listing counts were up by 33.2% year over year, and the number of newly listed homes was up by 11.1%. The figures highlight a market moving toward more balance, especially compared to the national active listing growth rate of 4.9% and new listing growth rate of 4.0%. Buying a home is still difficult, with listing prices continuing to soar at the same time that mortgage rates are at their highest point since 2008, and the worst inflation since the 1980s makes saving for a down payment even harder. Mid-sized Cities Lead the Emerging Pack The list of top emerging markets continues to highlight mid-sized cities this summer. In the wake of dramatic changes brought about by broader responses to the pandemic, smaller metro areas away from the coasts are thriving. The populations of the Top 20 markets averaged about 402,000 in Q2, less than the 600,000 in our Spring 2022 list, and also less than half of the average for the 300 markets—which was 915,000. In addition, 9 out of the 20 cities at the top have populations below the 250,000 threshold, includ- ing this quarter's leading metro, Elkhart. For many, the cost premium of living in a city like San Francisco or New York has lost its luster throughout the pandemic. With changing stages of life, as well as lifestyles and budgets, many professionals are looking for better work-life balance, along with a lower cost of living. Growing Local Economies Boost Housing As seen in the spring 2022 report, today's top-ranked housing markets are built on the founda- tion of a strong local economy. Having a solid employment base is a prerequisite for a healthy housing market, and the Top 20 list highlights metro areas with diversified economies and low unemployment. These metros have a blend of private industries, health care, higher education, along with government agencies and institutions. The strength of local markets is underlined by the 16 out of the top 20 metros which had unemployment rates at or below the national 3.6% rate in Q2 of 2022. Wages in the top markets were also slightly higher than in the entire group of 300 metro areas analyzed. Enhancing the employment picture, espe- cially in a return-to-work age, average commute times in the top 20 cities were slightly shorter than across all metros in the index. Active and Outdoor Lifestyles are the New Benefit The spring 2022 report also found that many of the quarter's top emerging markets were desir- able vacation destinations. While the summer list has a slightly lower vacation profile, the Top 20 cities offer what has become a must-have benefit in the pandemic age and will likely continue beyond: an active outdoors lifestyle. Most of the top are situated in the Sun Belt, offering a milder climate and more sunny days throughout the year. Whether it's access to mountains in North Carolina, Tennessee, Colorado, or Montana, or beach destinations like California or Florida, top emerging markets provide residents with easy access to the outdoors. These locations are well-suited for people looking for a higher quality of life, in any generation. For retiring baby boomers looking for an active lifestyle, these cities provide good weather, access to lakes, and other bodies of water, forests, and other outdoor destina- tions, all within a lower cost-of- living framework. For Gen X and millennials caring for children, many of the top markets benefit from a bevy of family-friendly amenities, including good schools, parks, beaches, mountains, and vacation homes. For Gen Z, these locales are home to colleges and universities, along with a large number of employers, as well as lower-priced housing. According to Redfin, sunny Miami was once again the most popular migration destination.

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