Sun Belt Continues to Attract Home Buyers from High-Tax Metros

Mike Sorohan msorohan@mba.org

August 13, 2019

It's hardly a secret that over the past several decades, the South and Southwest have seen strong population growth from northerly regions. Redfin, Seattle, said the pace picked up in the second quarter.

The company's quarterly Migration Report said 25 percent of home searchers looked to move to another metro area in the second quarter, compared to 24 percent a year ago. The national share of home-searchers looking to relocate has been at this level--the highest on record--since fourth quarter 2018.

Redfin analyzed more than one million Redfin.com users who searched for homes across 87 metro areas from April through June.

"People are increasingly looking to leave expensive coastal metros like New York, San Francisco and Los Angeles," said Redfin chief economist Daryl Fairweather. "Lower mortgage rates have made buying a home more affordable, but not affordable enough for typical homebuyers contending these areas' sky-high home prices and taxes. The homebuyers who are heading out of town in search of affordability don't just want to save a few hundred dollars per month, they want to save thousands of dollars per month, and the only way to achieve that kind of cost savings is to move somewhere more affordable."

Phoenix retained the number-one spot on the list of metro areas with the highest net inflow of Redfin users in the second quarter. However, the share of homebuyers searching in the Phoenix metro area from other metro areas fell slightly to 33.7 percent in the second quarter, from both a year earlier (34.0%) and the first quarter (34.5%).

The report said most of the top migration destinations are relatively affordable metro areas, especially compared to the places from which they are attracting the most new residents. This is the first time that Boston has made it into the top 10 migration destinations. Most of the interest in Boston is coming from New York; Boston has similar job opportunities but sales, income, and property taxes that are all considerably lower than New York.

In a separate analysis, Redfin determined the most popular neighborhoods for transplants in each of the top migration destinations, based on the share of Redfin.com home searches by users outside the area. Arcadia, Phoenix; River Park, Sacramento; and Buckhead, Atlanta topped the list of most attractive neighborhoods to newcomers, most of which were suburbs that tended to have higher median home prices than the overall metro area.

Redfin reported metros people most-often looked to leave was once again topped by New York, San Francisco, Los Angeles and Washington, D.C. in the second quarter.

The report can be accessed at https://www.redfin.com/blog/hottest-neighborhoods-in-cities-people-are-moving-to..

In April, the Census Bureau reported counties with the largest numeric growth are all located in the south and the west, with counties in Texas taking four out of the top 10 spots.

metropolitan area, Dallas-Fort Worth-Arlington, Texas, had the largest numeric growth with a gain of 131,767 (1.8 percent) in 2018, followed by Phoenix-Mesa-Scottsdale, Ariz. with an increase of 96,268 (2.0 percent). Migration, both domestic and international, as well as natural increase contributed to the growth in each of these areas, with natural increase serving as the largest source of population growth in Dallas and domestic migration serving as the largest source in Phoenix.

"One interesting trend we are seeing this year is that metro areas not among the most populous are ranked in the top 10 for population growth," said Sandra Johnson, a demographer in the Census Bureau's Population Division. "Though no new metro areas moved into the top 10 largest areas, Phoenix, Seattle, Austin and Orlando all experienced numeric increases in population since 2010, rivaling growth in areas with much larger populations. This trend is consistent with the overall growth we are seeing in the south and the west."

Among counties with a population of 20,000 or more, Williams County, N.D., was the fastest-growing county by percentage, increasing by 5.9 percent between 2017 and 2018 (from 33,395 to 35,350). The rapid growth Williams County, N.D., experienced was due mainly to net domestic migration (1,471) in 2018. The county also grew between 2017 and 2018 by natural increase (427) and international migration (52).

Of the other nine fastest-growing counties, all experienced positive domestic migration. All but Brunswick, N.C., and Hood, Texas, experienced growth through natural increase (having more births than deaths), and only Brunswick, N.C., had negative net international migration.

Of 3,142 U.S. counties, 1,739 (55.3 percent) gained population between 2017 and 2018. Twelve counties (0.4 percent) experienced no change in population during this time, while the remaining 1,391 (44.3 percent) lost population. Between 2010 and 2018, 1,481 (47.1 percent) counties gained population and 1,661 (52.9 percent) lost population.

Additionally, Census reported 1,640 (52.2 percent) counties showed positive total net migration in 2018, meaning more people moved into the county than moved out. This is roughly equivalent to the number of counties with positive net migration in 2017 (1,641 or 52.2 percent).

The report noted between 2017 and 2018, all 78 municipios (counties) in Puerto Rico decreased in population. Between 2010 and 2018, all but one municipio lost population; Gurabo Municipio increased from 45,371 in 2010 to 46,068 in 2018, a gain of 697 residents (1.5 percent). The largest numeric population decreases between 2017 and 2018 were in San Juan Municipio at -15,123 (-4.5 percent), followed by Bayamón Municipio (-8,013; -4.5 percent) and Ponce Municipio (-6,705; -4.8 percent).

The report said two of the 10 fastest-growing metro areas in 2018 are in Texas: Midland, Texas (first), with a growth of 4.3 percent (7,383) and Odessa, Texas (fifth), with a growth of 3.2 percent (4,951). Positive domestic migration contributed to the growth in both areas. Florida and Utah also each contains two of the fastest-growing metro areas in 2018.

Of the 390 metro areas within the 50 states, the District of Columbia, and Puerto Rico, 102 (26.2 percent) experienced population decline in 2018. All metro areas within Puerto Rico decreased between 2017 and 2018. The five fastest-decreasing metro areas (excluding those within Puerto Rico) were Charleston, W.Va. (-1.6 percent); Pine Bluff, Ark. (-1.5 percent); Farmington, N.M. (-1.5 percent); Danville, Ill. (-1.2 percent); and Watertown-Fort Drum, N.Y. (-1.2 percent). The population decreases were primarily due to negative net domestic migration.

Of the 555 micropolitan areas, 267 (48.1 percent) gained population between 2017 and 2018. Since 2010, 256 (46.1 percent) have gained population.

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