Home Buyers Are Leaving Major Metros...and Going to These Cities Instead

The real estate company Redfin recently found a pattern: Large groups are looking to leave their high-cost, urban areas and relocate to sunnier, less expensive parts of the country. Here, we'll look at the cities people are flocking away from and the cities in which they hope to land.

Taking flight

Redfin employed a brilliantly simple way to determine which city dwellers were most anxious to leave their current living situations. To do so, they checked internet searches. Here are the cities where the most internet searches were conducted by users looking for relocation information:

• San Francisco, California
• New York, New York
• Los Angeles, California
• Washington, D.C.
• Boston, Massachusetts
• Seattle, Washington
• Chicago, Illinois
• Denver, Colorado
• Hartford, Connecticut
• Minneapolis, Minnesota

Not surprisingly, seven of these cities are also listed among the Top 10 U.S. Cities with the Highest Cost of Living. Only Chicago, Hartford, and Minneapolis did not make the list.

Where people want to go, according to internet searches

The most popular cities for relocation searches are currently in the South. Here's a list of the Top 10, according to Redfin:

• Miami, Florida
• Sacramento, California
• Las Vegas, Nevada
• Phoenix, Arizona
• Tampa, Florida
• Dallas, Texas
• Cape Coral, Florida
• Orlando, Florida
• North Port-Sarasota, Florida
• Houston, Texas

Relocation does not appear to be all about costs. For example, living in Miami is not cheap. Nationally, the median home price is just shy of $385,000, while the median sold price in Miami is nearly $510,000. Still, Miami is the top dream destination for those leaving New York, New York, Washington, D.C., and Boston, Massachusetts.

While expensive, home prices in Miami are still lower than they are in these three major cities. For example, the median price of a sold home in New York, New York, is $843,000. In Washington, D.C., it's $668,000; in Boston, MA, the median price of a sold home is $779,000.

Buyers are also attracted by the fact that Florida has no state income tax, lowering their overall cost of living. Those who migrate with a checking account full of cash thanks to the sale of more expensive property are less put off by the current interest rates.

Where people are landing

Sometimes the dream does not match the reality. By the time buyers are ready to take out a mortgage, it's sometimes in a different spot than they expected. The moving and storage company PODS tracks where people are actually moving. Here are the 10 most popular destinations so far this year:

• Myrtle Beach, South Carolina/Wilmington, North Carolina
• Sarasota, Florida
• Orlando, Florida
• Ocala, Florida
• Houston, Texas
• Dallas-Fort Worth, Texas
• Knoxville, Tennessee
• Jacksonville, Florida
• Tampa Bay, Florida
• Greenville-Spartanburg, South Carolina

The market overall

Despite the spike in people heading South, Redfin reports that home-buying demand is coming down from its apex, including eight of these ten cities. The National Association of Realtors (NAR) reports that existing home sales decreased by 3.4% in April. Each of the four major U.S. regions has registered sales declines month-over-month and year-over-year. This figure includes single-family homes, co-ops, and condos.

Over the past few years, the housing market has caused a sort of whiplash. We were sailing along with low interest rates and just enough homes on the market to keep prices steady. And then the COVID-19 pandemic turned everything on its head. We watched prices soar, followed by mortgage interest rates.

At this point, all most of us will do is wait and watch for what happens next. Others will use this time to sell their homes for more than they ever thought possible and migrate to a region where the sun always shines, and cost of living is low.