Home News Redfin data shows home prices still skyrocketing in migration hotspots – but not in this California city

Redfin data shows home prices still skyrocketing in migration hotspots – but not in this California city

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Among the myriad changes that swept across the United States during the pandemic was an increase in migration from many large, densely populated areas- Including bay area -And a record surge in home prices across the country.

But how will home prices for immigrant magnets rise compared to metropolitan areas that are losing their inhabitants, such as the Bay Area? Are there fewer more affordable areas as new buyers flood the housing market? Are house price increases more restrained in high-departure areas?

An analysis of data from the 25 largest US metropolitan areas collected by the real estate listing website Redfin shows that these trends are often true, including the Bay Area.

However, some areas have proven to be surprising exceptions. Among them is Sacramento, a popular destination for residents of the Bay Area, where the housing market, which was hot in the early days of the pandemic, has recently cooled significantly.

use data New residences per 10,000 people in 25 metropolitan areas of the United States, based on April 2022 data from Redfin and the median rate of increase in median home sales prices from April 2021 to April 2022. Calculated. Redfin uses the search data to calculate the estimated migration. Numerical values ​​based on US census data.

As defined by Redfin, the Bay Area is part of the U.S. Census Statistics Area, which combines the San Francisco and San Jose metro areas, with nine Bay Area counties and five more counties (Merced, San Benito, San Joaquin, etc.). Santa Cruz, Stanislaus. Of the 25 markets surveyed, the San Francisco-San Jose metropolitan area had the highest number of residents per 10,000 people trying to leave the area in the past year, at -33.3. Home sales prices in the region rose 12.6% year-on-year.

Taylormer, Deputy Chief Economist at Redfin, said these trends could be due to several factors. Population decline is a relatively recent phenomenon in the Bay Area, he said. More people were moving to the Bay Area than they left in 2014, but in 2015 the tides began to change, immigration rates fell, and in the years that followed, they fell “dramatically.”

California Lost more than 117,000 Residents of 2021, several Bay Area counties, including San Francisco, are driving growth, each losing nearly 1% of its population. Nevertheless, last year’s state-wide population decline was lower than the 2020 estimate of 182,083.

Meanwhile, during the pandemic, home purchases surged in the region as more people were able to work in remote areas in search of more space. That demand, coupled with low inventories, continues to push up Bay Area home prices, despite the outward migration trend.

Housing demand in the region was strong earlier this year, boosted by a “fast-growing stock market” and low interest rates, Ma said. He also said that while the overall population may have declined, the number of households in the Bay Area has increased and more people have moved out of their parents’ homes and roommates’ situations, married and started a family. Stated.

But rising interest rates will not last long, Ma said.

“Interest rates are now rising at the fastest pace in history, exceeding 5%,” he said. “We expect prices to slow down and could be negative in some areas,” he said.

While that pattern is likely to be seen throughout the United States, coastal metropolitan areas are usually more sensitive to financial market conditions and therefore may have greater impact, Ma said.

Sacramento has the highest migration rate of the 25 major metropolitan areas surveyed by Redfin, with 24.5 new residents per 10,000 residents, compared to 12.3% year-on-year home sales prices. It rose moderately. The metro area attracted many Bay Area residents early in the pandemic as offices became remote and people sought more space.

Mr. Ma said there has recently been a “very big slowdown” following a “dramatic” 30% rise in home prices in the spring of 2021. He said he couldn’t pinpoint the reason, but during that period many Bay Area residents may have traveled to a wider area outside the state, not just Sacramento and the Central Valley. I doubted.

More supplies may also keep Sacramento’s house price rise low, he added. According to the April 2022 report from the Sacramento Association of Realtors, inventories increased 33% from April last year, with 1,342 active lists as of April 2022.

In contrast to Sacramento, more and more people are leaving in areas where home prices are rising. Seattle is a prime example, with the second largest outflow population of -28.9 per 10,000 and home prices rising 18.2%.

Many buyers are simply priced from the market, Ma said.

“Our data show that Seattle was attracting more people to move there a year ago,” he said. “Now more people are away from Seattle. It used to be a booming and fastest growing region, but it has changed rapidly as prices have risen rapidly.”

He said Salt Lake City follows a similar pattern. In the fourth quarter of 2020, “the boom of people has moved there” and the inflow of 2021 remained positive until the first quarter of this year.

“I find it appealing that the decline in migration shows that the area has become too hot,” he said, and many locals can no longer afford high home prices and look to the secondary market. Said that.

Phoenix, Orlando, and Dallas are among the major metropolitan areas in the United States with the highest year-over-year increases in domestic migration and home prices.

People leaving the Bay Area have had a “big impact” on locations such as Phoenix, some Texas cities, Seattle, Denver, and Salt Lake City, Ma said. He says those buyers brought them deep pockets, whether they sold their Bay Area homes and had a lot of cash on hand, or the ability to work remotely with high salaries. I did.

“On average, suburban buyers’ budgets are pretty high,” he said, and the amount of wealth flowing into those markets has boosted house price inflation.

On the east coast, Ma said the patterns were slightly different. He said that while many New Yorkers moved to the Atlanta and Florida metros, there were also many second home buyers buying real estate in Florida and the Gulf Coast.

Kelly Fan is a staff writer at the San Francisco Chronicle. Email: [email protected] twitter: @KellieHwang

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