People are fleeing high taxes on the coasts for more affordable markets in the interior.
According to a report from Redfin, 24% of its website users who were searching for a home in the second quarter looked to move to away to a new metro area. This is a 3% increase in restlessness over last year at this time.
By and large, people in high-tax coastal markets like San Francisco, New York, Los Angeles and Washington, D.C., searched for homes in lower-tax, more affordable metros like Phoenix, Las Vegas and Miami.
"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,” Redfin Senior Economist Taylor Marr said in a statement.
"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,” he added.
According to the report, San Francisco, New York, Los Angeles, Washington, D.C., and Chicago exhibited the highest net outflows in Q2, meaning that more people want to leave than want to move there.
Of all Redfin users in the Bay Area, 22% searched for homes outside of San Francisco; 36.3% of New Yorkers searched for a home outside their metro; 15.5% of Los Angelenos looked for homes outside of L.A.; 10% of Washington, D.C., dwellers were looking outside the metro for a new home; and 9% of Chicagoans searched for a new metro to call home.
Phoenix, Sacramento, Atlanta, Las Vegas and Portland soaked up the lion’s share of attention from coastal dwellers looking to become inland dwellers.
Of the searches for Phoenix homes, 34% came from out of state. Its top metro of origin for these searches was Los Angeles.
San Franciscans cast a covetous eye on Sacramento, which received 39.9% of its searches from outside its borders. The top out-of-state origin of searches for Sacramento was Seattle.
Atlanta received 26.7% of its Q2 searches from outside the city limits. New Yorkers were particularly keen on Hotlanta.
Las Vegas garnered a whopping 41.4% of its searches from out of the metro, most of which came from Los Angeles.
And finally, Portland got 18.2% of its searches from outside of the metro, with most coming from San Francisco.
More and more affordability is becoming a factor large enough to create an exodos from many of the nation’s favorite metros. The national housing distribution appears to be in line for a shake up, and it could mean new demand for once sleepy markets.
