The strain on housing affordability has continued to push many buyers to look for better prospects in the market over the past two years. New research from realtor.com® shows that the trend hasn’t let up as cost pressures send home shoppers across state lines at a higher rate.
The report found that buyers interested in out-of-state listings rose 4.1% in the first three months of 2022 to 40.5% compared to the first quarter last year.
The top 10 destinations were: El Paso, Texas, Albuquerque, New Mexico, Washington, D.C., Birmingham, Alabama, Hartford, Connecticut, Omaha, Nebraska, McAllen, Texas, New York, New York, Augusta, Georgia. and Greensboro, North Carolina.
Key findings:
- More than 40% of prospective buyers viewed home listings outside of their current state in the first quarter of 2022—up from 36.4% and 33.4% in 2021 and 2020, respectively.
- 2022 Q1 data shows interest from home shoppers from other states is at the highest level of any quarter since 2018 Q1.
- Six of the top 10 destinations are in Sun Belt metro markets.
- Five of the six Sun Belt metros counted northern cities as top sources of out-of-state demand.
- In eight of the top 10 relocation destinations, listing prices per square foot were lower than the national average ($206).
- With more flexibility, some home shoppers migrate toward warmer climates.
- With tighter budgets, buyers expand search areas in search of affordability.
- As some buyers pursue the downtown life, big city demand returns.
The takeaway
“After two years of pandemic remote work, offices have started to reopen, but instead of seeing a slowdown in the number of people interested in homes out of state, we’re seeing an acceleration,” said realtor.com® Chief Economist Danielle Hale. “Taking a closer look at the top destinations, we see some very different trends driving the desire to live out of state and home shoppers’ diverse needs.
“First, affordability remains a key focus for buyers, with demand for less expensive areas surging in recent months as climbing inflation and mortgage rates compound cost pressures faced by buyers. Next, flexibility enabled by broader adoption of remote work has fueled interest in sunnier climates, such as the Sun Belt. And finally, some people are simply ready to get back to normal, with some buyers’ desire to live downtown lifestyles driving two big cities into the top 10.
“In addition to the full rebound of out-of-state demand to New York, Washington D.C. and Hartford, the fact that these markets made the top 10 destinations in 2022 Q1 signals the return of some pre-COVID norms. It simply comes down to stage of life, which housing decisions are often tied to, as big cities have historically seen strong inbound demand from young buyers from all over the country looking to establish themselves.”
To read the full report, click here.
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news ideas to jgrice@rismedia.com.
