You’re probably familiar with the headlines that suggest that the pandemic forced mass migration out of crowded cities. However, recent U.S. Census Bureau data indicates a contrary trend.
Data released on Nov. 17 found that roughly 27.1 million Americans reported living in a different residence than a year earlier—down from 29.8 million in 2020. The findings marked the lowest rate of movement that the bureau recorded in 70 years—an 8.4% mover rate.
Experts say the findings also indicate a decades-long trend that has been exacerbated by various factors predating the 2020 outbreak of COVID-19.
“While we certainly have cases of people relocating to other parts of the country, we also have significant dispersion within metropolitan areas,” says Sam Chandon, dean of the Shack School of Real Estate at NYU. “Overall, what we see is that the pandemic has made it difficult to relocate, but for some households, it’s undermined their incentives to move.”
While people have traditionally moved as part of different life cycles, Chandon suggests that aging in place has become a significant long-term contributor to the downward trajectory of the nation’s movement rate.
“Many aging families and individuals choose to and wish to remain in the homes where they raised their families and spent the last 20 or 30 years,” Chandon says.\
However, the shift isn’t solely based on older homeowners, according to Helen Hanna Casey, CEO of Howard Hanna Real Estate.
She suggests that younger buyers have recently opted for more space sooner in their lives, which has also fueled declining mobility.
“In the past 15 years, they were buying more housing than they were before, which meant fewer moves projected in their lifetime,” Hanna Casey says.
In the last decade alone, homeowners and would-be sellers have been staying in their homes longer than in previous years, according to Jessica Lautz, vice president of Demographics and Behavioral Insights at the National Association of REALTORS® (NAR).
Lautz notes that home tenure hit an all-time high of 10 years and has remained elevated for several years after 2009.
“When we look at homebuyers when they look to purchase a home today, they are saying that they do expect to own the home for a decade,” Lautz says.
While she suggests that trend is partially due to a “hangover effect from the Great Recession,” Lautz also says that the pandemic contributed to the shift.
Things have started to turn around, based on NAR’s 2021 Profile of Home Buyers and Sellers report, which showed that tenure in a home had dropped from ten years to eight—the largest single-year change in home tenure in the history of the data set.
“It’s still elevated, but it’s heading in that direction,” says Lautz.
According to Hanna Casey, the past decade of underbuilding and investment in the housing market hasn’t helped the issue either.
“The lack of new construction inventory to appeal to people is a huge problem in the country right now, and it’s why people don’t move,” Hanna Casey says.
Chandon echoed similar sentiments.
“When it comes to actually finding and bidding successfully for a single-family home, we’re in a very supply-constrained market,” Chandon says.
He also notes that intense competition and persisting affordability challenges have kept would-be buyers subdued even in today’s market.
While the Census findings cover changing living conditions, industry leaders argue that the figures aren’t indicative of sales activity in the market, which has shined in the past two years.
“What’s interesting to me about that is that it’s in direct conflict with what we are seeing in terms of closed sales domestically for 2021,” says Christy Budnick, CEO of HSF Affiliates and Berkshire Hathaway HomeServices.
Existing-home sales spiked in 2020 with 6.76 million transactions. Based on recent NAR reports, November 2021 hit 6.46 million home sales, inching closer to last year’s figures, with the possibility of exceeding them.
“While I expect to see a slight decline in 2022, I do not see home sales dropping significantly below the steady activity we have seen for the last several years,” says Paul Boomsma, president and CEO of Leading Real Estate Companies of the World®.
Boomsma suggests that the increased popularity of remote working prompted homeowner flexibility and new location options, which fueled transactions previously not considered before 2020.
While demographic and inventory factors fueling the gradual shift in mobility are likely to stick around, brokers say that real estate professionals can still win despite the market conditions.
“Good brokers and agents will still have strong business opportunities and should continue the best practices that work in any market—staying in touch with past clients, continuously expanding your sphere and, most importantly, delivering highly-responsive, customer-first service,” says Boomsma.
Craig Cheatham, president and CEO of The Realty Alliance, suggests that real estate professionals plan accordingly if they want to succeed in future markets.
“One positive result of the pandemic was the concept of ‘home’ was enhanced through the crisis,” Cheatham says. “When uncertainty was at its height, authorities instructed everyone to shelter at home. This new or renewed appreciation bodes well for our industry.”
While some households may be reluctant to move, Cheatham believes introducing a second or vacation home purchase could be a boon for real estate professionals.
“The most effective way for the housing industry to increase mobility will be to introduce new types of inventory to the marketplace—categories of housing that match specific needs of various lifestyles and life phases,” Cheatham says.
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news ideas to jgrice@rismedia.com.
