Small populated apartments in less-populated communities are expensive, while large affordable condos in densely populated areas are not. The COVID - 19 pandemic shifted homebuyers preferences in a major way, making these three cities the hottest cities in the U.S. last year. The 2015 release of the CoreLogic South Inc. report was the highest metros for residential in-migration and out-migration, according to Riverside-San Bernardino-Ontario, Calif. Lakeland-Winter Haven, Fla. and Myrtle Beach-Conway - North Myrtle Beach, SC-NC had the most open maps, according to the CoreLogic Hottest Cities for Homebuyers report for 2020.
What are the signs of reshuffling, says Frank Nothaft, founder and CFO of CoreLogic? 'People are moving to areas of low population and lower cost of living.
In 2020, the average home price in Los Angeles was $436,288, almost half the average price of a home in Riverside, Calif., report said. Meanwhile on the East Coast, the average home price in New York City was $656,214, far higher than Tampa where the average home price was $348,849.
'The pandemic severed the need for employees to be near or co-located with their employer, Nothaft said, adding that the shift toward cheaper locales began several years before COVID 19 hit the country.
However, the pandemic accelerated this shift, he noted. 'It increased the desire for more living space, inside and outside, said he.
While people were making big moves, they weren't physically moving very far. New York lost a good share of its potential homebuyers to affordable neighboring metros such as Philadelphia and Allentown in Pennsylvania, Bridgeport in Connecticut and Poughkeepsie in New York state. Last month, John Burns Real Estate Consulting noted the buyers save about $236,000 on a resale and $438,000 on a new home in New York when comparing median home values to its bigger sister city of Philadelphia in a research note titled 'The Rise of the Sister Cities as an Affordability Solution' John Burns defines sister cities as locales that sit within a two hour drive from their counterparts.
'Sister cities are being witness to a lot of regional migration from residents leaving bigger sister complements, John Burns Real Estate Consulting analysts wrote in the note.
'The pandemic created the perfect recipe for consistently employed Americans, said Archana Pradhan, CoreLogic's principal economist, in the report. If it had been any other mix of events, the situation would have featured such a large group of homebuyers feeling empowered to make bold moves in their living situations if low housing inventory was coupled with high education inflexibility.
One thing was top of mind for those considering the plunge: affordability. In the in-migration metro areas, 10 out of the top 15 in-migration states were in states that don't have income taxes : Florida, Nevada, and Texas. Meanwhile, coastal cities were on the out-migration list with low-tax state prices. Seattle, Boston, Chicago, Portland, Oregon — all known for high home prices and population density — were also listed on the out-migration list.
Nothaft thought we were approaching migration's end. He observed that he is not so sure now that major cities for indoor dining and gyms have reimposed mask mandates and other vaccination requirements for masks to combat the rise of Delta variant cases across the country.
The new measures may put legs under this reshuffling': Nothaft said. Nonetheless, he remains hopeful that pandemic is behind us. Now, he said, the bigger question is this: Will remote work stick in the labor market?
According to the consulting firm McKinsey Co. 'considering only remote work that can be done without a loss of productivity, we find that about 20% to 25% of the workforces in advanced economies could work from home between three and five days a week. In that analysis, Nothaft thinks that the great migration in the U.S. could linger. John Burns analysts agree, noting: 'We expect this trend to continue as work-from-home permissions become clearer for many.
There's this insatiable desire to have more space because you need a school room and an office from home, the desire for more living space inside and outside, Nothaft said.