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Where Are Americans Moving & Why?

Home with red fall tree in front yardMy son and I were out mountain biking in the East Bay hills yesterday, when we stopped to admire the view (pictured at the bottom of this blog).

The view was stunning and the day was perfect (light breeze, 70 degree temp, blue skies), and the topic of moving came up.

I mentioned that an acquaintance of ours is probably saving $2 million per year from lower taxes and reduced labor and compliance costs b/c he moved his business from CA to TX.

I asked my son if he thought it was worth it, and he said: “no way…living in paradise is well worth the extra $2 million and if someone is saving that much money, that means they are making that much more and can well-afford to stay in CA.”

I then mentioned that our acquaintance and most Texans consider Texas “paradise,” but my 26-year-old, unmarried, kid-less, tech engineer, Bay Area-loving son wasn’t having it.

I thought to myself that politicians in higher-cost areas are all hoping that more people share my son’s perspective than that of our acquaintance who moved.

But the fact remains that people are moving in droves right now, and what matters is why and where (so investors and all buyers can make better informed decisions).

Fortunately, Forbes.com recently published this article titled “Here’s Where Americans Are Moving (And Why)”

The author did a “deep dive” into data from Zillow, CoStar and Realtor.com, and more specifically he “had Zillow look at America’s 100 largest real estate markets based on five metrics—median sale price, median list price, days to pending, share of listings with a price cut, and page views—and grabbed the top and bottom seven in each one.”

Here are some key takeaways:

  1. Americans in general are seeking less density, more outdoors, lower taxes, and less regulation in the places where they live and invest in real estate
  2. Americans in general are also moving south and southwest towards warmer, healthier climates.
  3. Smaller, less prominent cities such Columbus, Boise, Salt Lake City, Cincinnati and Stamford (outside of New York City) are among the hottest markets in America right now.
  4. People still want to remain within commute distance
  5. People still follow employers in general, and employers themselves are still moving to places where there is ample office space, e.g. Phoenix or Atlanta.
  6. The Northeast still remains very “hot,” despite the trend towards warmer climates.
  7. People and employers still want to remain near areas with ample, highly educated human capital.
  8. Even the coolest markets remain “hot” in this market. There are no California or Pacific Northwest Cities in any “Best of” categories, but as we all know – those markets remain extremely hot; they are just not “as hot” as the low tax, low regulation cities with warmer climates.

CONCLUSION:

If I were an investor, I would probably look for opportunities in cities like Austin (#1 in many categories) with lower taxes, less regulation and a warmer climate.

But, if I were a buyer looking for a home, I would buy where I wanted to live and not worry about trends that may be short-lived (especially when the so-called cooler markets remain red-hot too).

Brown hills

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167