Washington continues to fare better than most states on many metrics, for example, revenue growth and population gain. So it was a bit surprising to see the Seattle metro ranking as the 7th top city for out-migration in a new CoreLogic real estate report. In the discussion of out-migration trends, the report says,
The New York-Newark-Jersey City metro area tops the list for the highest out-migration activity, followed by Los Angeles, San Francisco, San Jose and Washington, D.C. For the most part, residents left these expensive metro areas for less costly housing markets or for warmer weather…
Other cities with high out-migration included Seattle, Boston, Chicago, San Diego and Portland, all known for high home prices and population density. Areas that experienced population and home price explosions in recent years also lost residents, including Denver and Salt Lake City.
Here’s the full list:
Given the ongoing discussion about the capital gains income tax, this finding may be of interest.
CoreLogic analysis found that buyers who opted to relocate to a new metro area often chose a housing market adjacent to their previous location, a more affordable housing market or both. When looking for affordability, many homebuyers focus on eliminating state taxes. Among the top 15 metro areas with the highest recent in-migration activity, 10 popular metros were in locations that do not have state income taxes, including Lakeland-Winter Haven, Tampa, Port St. Lucie, Jacksonville, Daytona Beach, Fort Myers and Sarasota in Florida, and Las Vegas, San Antonio and Dallas. In addition to tax considerations, homebuyers who can relocate typically review the median sales price in different housing markets and what they can find in their price range. The prevalence of doing everything at home —including work, school, exercise and entertainment —meant that many homebuyers wanted to upgrade their living space and their outdoor space. Many people living in smaller urban and inner suburban homes realized they could afford a place with a home office, room to exercise and a backyard if they moved to a less costly area. (Emphasis added.)
The pandemic appears to have acted as an accelerant.
According to CoreLogic, 2020’s homebuyers left states with high taxes and expensive housing, particularly coastal locations such as New York and California, and relocated to metro areas in Texas, Florida, North and South Carolina, Georgia and Tennessee. “The pandemic created a perfect recipe for consistently employed Americans,”said Archana Pradhan, CoreLogic’s principal economist. “If it had been any other mix of events, for example, if low housing inventory was coupled with job inflexibility, we wouldn’t have had such a large group of homebuying consumers feeling empowered to make bold moves in their living situations.”
Once again, it’s unclear whether this is a temporary trend that will unwind with general economic recovery or whether something else is happening.