More buyers want to quit expensive coastal markets says Redfin

Rise in those seeking more affordable metros

By Steve Randall

13 Sep 2018

There has been an increase in those living in expensive high-tax areas searching for homes in more affordable metros.

That’s the finding of an analysis by Redfin which used a sample of 1 million of its users who searched for homes across 80 metro areas from April to June 2018.

The share of those looking to move to another metro was 24%, up from 21% a year ago.

Ranking metros by net outflow, San Francisco, New York, Los Angeles, Washington, and Chicago were the top 5.

"With home prices reaching new heights in many metro areas, it's no surprise people are continuing to move away from expensive metros in search of homeownership," said Taylor Marr, Redfin senior economist. "Last year's tax reform poured fuel on the fire. By capping mortgage interest and state and local tax deductions, there is an even greater incentive for homebuyers to consider moving to a lower-tax state."

Across the ten metros that saw the highest number of people leaving in the last quarter, the local tax burden (relative measure of average sales, income, and property taxes) was three times higher than the top 10 destinations.

Table: Top 10 Metros by Net Outflow of Users and Their Top Destinations
Rank	Metro*	Net Outflow†	Net Outflow Last Year	Portion of Local Users Searching Elsewhere	Top Destination	Top Out-of-State Destination
1	San Francisco, CA	27,849	16745	22.1%	Sacramento, CA	Seattle, WA
2	New York, NY	23,559	15644	36.3%	Boston, MA	Boston, MA
3	Los Angeles, CA	13,370	13109	15.5%	San Diego, CA	Phoenix, AZ
4	Washington, DC	5,900	5499	10.0%	Philadelphia, PA	Philadelphia, PA
5	Chicago, IL	3,428	2366	9.1%	Phoenix, AZ	Phoenix, AZ
6	Denver, CO	3,007	338	22.6%	Colorado Springs, CO	Seattle, WA
7	Milwaukee, WI	787	226	39.1%	Chicago, IL	Chicago, IL
8	Houston, TX	336	317	25.2%	Austin, TX	Chicago, IL
9	Eugene, OR	288	-201	44.3%	Portland, OR	Seattle, WA
10	Detroit, MI	263	309	21.9%	Chicago, IL	Chicago, IL
*Combined statistical areas with at least 500 users in Q2 2018 †Among the one million users sampled for this analysis only

Redfin commissioned a survey in May 2018 which added more insight into the reasons why people are moving to new metros.

Of the 1,300 people who had bought a home in the past year:

8% of people said they shifted their search to a state with lower taxes due to the new tax law.
9% said they shifted their search to nearby cities with lower taxes.
10% said they bought a less expensive home because of the decreased benefits on high-priced homes.
10% bought a more expensive home because their after-tax income grew.

Table: Top 10 Metros by Net Inflow of Users and Their Top Origins
Rank	Metro*	Net Inflow†	Net Inflow Last Year	Portion of Searches from Users Outside the Metro	Top Origin	Top Out-of- State Origin
1	Phoenix, AZ	6,349	3849	34.0%	Los Angeles, CA	Los Angeles, CA
2	Sacramento, CA	6,208	4833	39.9%	San Francisco, CA	Seattle, WA
3	Atlanta, GA	5,112	2767	26.7%	New York, NY	New York, NY
4	Las Vegas, NV	3,786	3509	41.4%	Los Angeles, CA	Los Angeles, CA
5	Portland, OR	3,614	1190	18.2%	San Francisco, CA	San Francisco, CA
6	Austin, TX	3,212	1655	27.4%	San Francisco, CA	San Francisco, CA
7	Dallas, TX	2,979	2036	22.3%	Los Angeles, CA	Los Angeles, CA
8	Miami, FL	2,575	1746	24.2%	New York, NY	New York, NY
9	San Diego, CA	2,537	5286	24.1%	Los Angeles, CA	Seattle, WA
10	Nashville, TN	2,462	1364	33.6%	New York, NY	New York, NY
*Combined statistical areas with at least 500 users in Q2 2018 †Negative values indicate a net outflow; among the one million users sampled for this analysis only