So Long, New York and L.A.! Here Are the Cities Luring (and Losing) the Most Americans

So Long, New York and L.A.! Here Are the Cities Luring (and Losing) the Most Americans

Whatever happened to American wanderlust? Manifest destiny? Hitting the road?  

The fact is, Americans are less likely to pack up their belongings and relocate now than at any point in recorded history: Only about 11% moved to new homes last year, the lowest rate recorded since the government started keeping track 70 years ago. This includes a drop in the number of folks moving to new homes in the same state, as well as those moving across state lines.

Why are more people staying put? Part of it is due to the torrent of millennials, with their mountains of debt and shifting job prospects.

“It is a tough time for people in their 20s. … It takes young people five to six years longer now to get out of the house compared with previous generations,” says John Cromartie, a geographer at the U.S. Department of Agriculture.

Then there’s the general aging of the population, with many baby boomers already ensconced in their forever homes.

Make no mistake: The pool of movers may be shrinking, but the country is still going through a period of profound migration—with some places losing and others gaining. And this smaller group of movers is having an enormous impact, since newcomers remain the lifeblood of big housing markets, keeping builders busy and home prices rising.

The realtor.com® data team analyzed migration trends to find the metropolitan areas* gaining the most new residents, and those seeing the biggest population declines. During the recession, Americans flocked to the biggest cities where finding a job was easier. But in the rebounding years, these meccas, such as New York and Los Angeles, have seen housing costs soar and people relocate to more affordable destinations.

“Right now the numbers are showing [people moving] to the West and South, and away from the Northeast and Midwest,” says demographer Ken Gronbach of KGC Direct. “Cities where taxes are low and housing [costs are] reasonable will see a huge influx of people over the next five to 10 years.”

Just because a place ranks high for losing residents doesn’t mean plenty of people aren’t moving there—it’s just that more people are moving out of that market than are coming in. We came up with our ranking by analyzing recently released U.S. Census Bureau population data from 2012 to 2016. We calculated the net migration for every metropolitan area** by  measuring the difference between the numbers of residents moving in and those moving out.

So let’s start with the cities attracting newcomers like floodlights attract luna moths!

 

1. Phoenix, AZ

Median list price: $329,975
Increase in new residents**: 37,188
Top place of origin (out of state): Los Angeles, LA

After years of watching his commute get longer and the price of just about everything in San Bernardino, CA, go up, police officer Brent Wood, 45, had enough. So he and his family sold their modest 1,200-square-foot home; in August, they moved into much larger, three-bedroom digs in Phoenix at the end of a cul-de-sac, all for about the same price. It even came with a large backyard, a big plus for the family and their three dogs.

“Everything has been great since we moved,” says Wood. Phoenix has “clean freeways, friendly people, amazing weather, lower gas prices, and lower food prices.”

The Phoenix region has become a top destination for folks fleeing high-cost West Cost cities.

Phoenix has long been known for its huge retirement communities like Sun City, a 55-plus active community built in the 1960s with golf courses and one-story homes with gated back yards.

But new residents aren’t just retirees and snowbirds. The region’s strong local economy is seeing a number of employers relocate to the area and bring a younger workforce with them. These workers are buying reasonably priced condos within walking distance to light rail.

2. Riverside, CA

Median list price: $389,050
increase in new residents: 30,943
Top place of origin (out of state): New York, NY

For a lot of Americans, spending $400,000 for single-family home in the suburbs with a garage and a small yard might sound like a lot of dough. Not for Californians. Riverside has seen a slew of transplants from nearby San Diego and Los Angeles, where median prices are way higher—$657,000 and $725,000, respectively.

“We’re inexpensive in relation to other parts of Southern California,” says Matthew Rundle, a mortgage banker at Westin Mortgage in Riverside. Many of the new residents are midcareer or close to retirement who are cashing out at peak real estate prices.

Aside from reasonable real estate prices, Riverside touts its ample amount of shiny, new homes: New construction makes up 7.7% of all listings here, compared with 4.6% in San Diego.

3. Austin, TX

Median list price: $349,950
increase in new residents: 29,192
Top place of origin (out of state): New York, NY

The capital of Texas has done something that very few tech hot spots have managed to pull off lately: keeping home prices from reaching astronomical heights. While locals may bemoan high price tags, they’re still just a fraction of those in Silicon Valley, where the median for homes is $1.1 million. Helped out by lots of new construction, prices here have fallen 4.1% year over year.

The jobs and affordable homes are attracting hordes of millennials and Gen Xers. They’re coming primarily from San Francisco, Los Angeles, and Houston.

And they’re snapping up new condos near downtown as well as newly constructed single-family homes out in the suburbs. In Manor, TX, just 20 minutes outside of Austin, buyers can find plenty of new, four-bedroom homes priced under $250,000. More than half are new, which is one of the reasons realtor.com named it one of America’s 10 fastest-growing suburbs.

4. Houston, TX

Median list price: $310,050
increase in new residents: 29,098
Top place of origin (out of state): New York, NY

Hurricane Harvey devastated parts of Houston, causing billions of dollars in damages. But that destruction hasn’t slowed the number of folks moving to the nation’s fourth-largest city for its many good-paying jobs, particularly in the oil and gas industries. In fact, the Houston metro added 111,200 jobs in the 12 months following the storm.

“They’re not moving here for the climate or the scenery. It’s for work, “says Greg Nino, a real estate agent with Re/Max Compass in Houston.

The vast majority of newcomers are millennials or Gen Xers, who are buying big $300,000 to $400,000 new, single-family homes in the city or surrounding suburbs. The ones who still want to live it up a bit are snagging three-story townhomes near downtown priced around $350,000.

5. Orlando, FL

Median list price: $299,950
increase in new residents: 26,635
Top place of origin (out of state): New York, NY

Home to Mickey, former home to Shamu, and a tourist magnet to the world, Orlando is aggressively moving beyond the vacation trade. High-paying jobs in medical sciences and technology fields, along with reasonable real estate prices and lots of sunny weather, are snagging more and more young residents. Orlando’s even becoming cool (relatively speaking).

Many transplants are coming from the Northeast, including New York and New Jersey, says local real estate agent Rose Kemp. She’s also seen quite a few Puerto Ricans moving in after Hurricane Maria devastated the U.S. territory.

This influx of newcomers means builders are busy. Orlando has a number of three- and four-bedroom homes going up in new subdivisions in the region. In Lake Nona, new community, buyers can find three-bedroom homes priced around $400,000 with access to pools and state-of-the-art fitness centers.

The rest of the top 10 metros where the most folks are moving to include Dallas; Las Vegas; Columbia, SC; Tampa, FL; and Charlotte, NC.

OK? Now let’s take a tour of the places people are leaving in droves.

---

1. New York, NY

Median list price: $529,050
Decrease in residents**: -222,959
Top destination (out of state): Miami, FL

America’s largest city is more than just a place so nice they named it twice: It’s also the one that sees the most residents coming and going. They come for the excitement and the gigs; they leave because of sky-high housing prices (and let’s not even talk about the subways). But in recent years those leaving have outpaced those coming. They’re headed to lower-priced cities like Miami, Philadelphia, and Atlanta (in that order).

So what impact will the arrival of new Amazon headquarters in the Long Island City neighborhood of Queens have on this equation? Time will tell. On the plus side, the company is adding 25,000 well-paying jobs; on the minus, prices in the area are already surging.

It all contributes to the famous Big Apple churn.

“Unless you have an unlimited budget, you’ll need to make a sacrifices eventually,” says Gary Malin, president of the New York real estate brokerage Citi Habitats. “Not everyone wants to be in the city forever. … The hustle of city life and the costs can get old.”

2. Los Angeles, CA

Median list price: $725,050
Decrease in residents: -108,421
Top destination (out of state): Phoenix, AZ

For many, the gorgeous beaches, incredible year-round weather, and general fabulosity of this West Coast mecca make it a certain kind of American ideal. But like New York, it both attracts and repels residents. Lately it’s doing more of the latter.

High real estate costs have pushed folks farther and farther out of the city, making commutes more grueling and longer than ever. An April analysis by the realtor.com data team found that only 1 in 3 Los Angeles homes were within a middle-class household’s price range. That’s led the typical L.A. driver to spend more than 100 hours per year in freeway congestion, the highest in the nation, according to INRIX, a transportation analytics firm.

So who’s leaving? Mostly folks in their 40s and above who are taking off for states like Texas, Arizona, and Nevada, where real estate prices are lower, the economies are strong, and the weather is still warm. Those moving in tend to come from the Northeast, like New York and New Jersey, where they’re used to high prices and are looking for better weather (way better).

Perhaps a slowing real estate market in L.A. will help to stop the outflow of residents. Home prices are still up 3.5% year over year. However, the number of properties experiencing price cuts surged 76% in November. Meanwhile, inventory climbed 27% year over year, giving buyers more choices.

3. Chicago, IL

Median list price: $285,000
Decrease in residents: -100,348
Top destination (out of state): Houston, TX

Once they hit retirement, many baby boomers are saying goodbye to the Windy City and hello to the mild winters in Arizona, Florida, and Texas. This is the biggest group leaving Chicago.

But they aren’t just headed out because of the cold. Property tax bills keep getting bigger in Chicago, including the latest hike over the summer. Fun fact: Illinois has the second-highest property tax rate in country, with only homeowners in New Jersey paying more, according to ATTOM Data Solutions, a real estate data firm. When folks leave the area, that creates a bigger budget shortfall and creates still more tax increases.

“We have great jobs here, but Chicago is getting expensive,” says Scott Curcio, a broker at Coldwell Banker in Chicago.

That could explain why they’re going to affordable Houston, where home prices are reasonable and the mercury doesn’t drop into negative temperature territory.

4. Detroit, MI

Median list price: $226,300
Decrease in residents: -38,161 
Top destination (out of state): Phoenix, AZ

Even as long-downtrodden Detroit continues to lurch toward a real revival, the region still faces a number of challenges. That’s what happens when a population falls from 1.8 million in the 1950s to below 700,000 today.

And despite a surge in new development and new jobs, residents are still leaving the city. Some are recent graduates heading to healthier cities, some are retirees heading for the Sunshine State or Arizona. And the region is losing residents to other Michigan metros like Lansing, little more than an hour away, and Grand Rapids, two hours away.

But it’s not all doom and gloom in the Motor City.

Some middle-aged and young professionals who grew up in Detroit are now moving back after seeing development of restaurants and nightlife in downtown, says Thomas Nanes, a real estate agent at Community Choice Realty Detroit. They’re buying everything from condos in converted warehouses to dirt-cheap, fixer-uppers in the burbs for under $75,000.

5. Washington, DC

Median list price: $430,050
Decrease in residents: -35,083
Top destination (out of state): Houston, TX

The nation’s capital region is well-accustomed to turnover. Case in point: In January 2017, when President Donald Trump took office, he ushered in a new army of federal employees. Meanwhile, many of the Obama-era folks took new jobs in other cities.

Plus, the city is packed with 20- and 30-somethings working for nonprofits, newsrooms, and political campaigns, who don’t stay forever. While working here they rent bedrooms in colorful row homes in the Dupont Circle neighborhood with gaggle of roomies—or they rent apartments in large buildings in nearby burbs such as Arlington, VA. But after a few years learning the ropes and paying their dues, many of these young folks take off for other cities.

“On Capitol Hill people are working 50 to 60 hours a week in an intense and exciting environment,” says Cromartie, the USDA geographer who studies population trends. “But that life is very much for younger people who then move on and up [and out].”

The decline in population isn’t happening all over the region. In fact, the city of DC on its own saw a positive jump in the number of folks moving in. It was the surrounding suburbs that saw declines. However, that’s likely to change when Amazon opens its second headquarters in Crystal City, VA, just outside of the capital.

The rest of the top 10 metros where the most folks are moving away include San Diego; Anchorage, AK; Philadelphia; Miami; and Boston.

---

* A metropolitan statistical area is a designation that includes the urban core of a city and the surrounding smaller towns and cities. Census had data only for around 400 metros. 

** We subtracted the number of incoming residents from the number of outgoing residents. This figure is the metro’s net migration. The count did not include those moving within the same metros, foreigners moving to these U.S. metros from other countries, or those leaving America to go to other parts of the world.

Allison Underhill contributed to this report.

The post So Long, New York and L.A.! Here Are the Cities Luring (and Losing) the Most Americans appeared first on Real Estate News & Insights | realtor.com®.

Source: Real Estate News and Advice – realtor.com » Real Estate News