Homebuyers continue their housing search further afield

Homebuyers continue to seek out long-distance moves heading into 2022 — proving that pandemic-homebuying conditions continue to stick — for now.

31% of home searchers are looking to relocate outside of their current metro area as of Q4 2021, according to Redfin. This is up a slight 1% from the year prior. However, this is up more significantly from pre-pandemic levels, when 26% of the share of house hunters searched outside their metro area in 2019.

Driving this trend is the continued shift to remote work — allowing for homebuyers to choose housing locations based on wants rather than commute times.

Another of the main forces behind California’s migration patterns — which we’ve seen continuously rising the past two years — is the necessity for many of today’s homebuyers to flee high-cost coastal metros to be able to qualify to buy in less costly inland metros.

This trend is evidenced by the decline of California’s population in its major coastal cities.

In fact, many of California’s most populous metros account for the top metros across the nation which are hemorrhaging homebuyers. The net outflow of home searchers is highest in:

• San Francisco, where 48,900 house hunters searched outside their metro, up from 42,000 a year earlier; and
• Los Angeles, where 39,600 house hunters searched outside their metro, up from 24,200 a year earlier.

Accordingly, the top search destination from each was respectively Sacramento and San Diego.

Sacramento was one of the top metros across the nation in terms of net inflow — the number of potential homebuyers searching to move into the metro rather than out. In Q4 2021, it saw 41% of its portions of searchers from users designated outside of Sacramento. The top origin of those searching in Sacramento was from San Francisco.

Related article:

Goodbye Golden State: Ex-Californians seek out lower costs of living

Domestic migration is trending

The trend of home searchers looking to leave costly coastal cities and migrate to less costly inland areas continues strong.

These inland areas are less restricted in terms of zoning, which allows for more construction and healthier housing markets, with more flexibility to react to demand.

California’s large coastal metros lack space and zoning lenience for building, and cannot compete with demand, continually outpacing inventory for sale. The inventory shortage reached new lows throughout the pandemic, and has not experienced a decent recovery since. Fewer homes listed on the multiple listing service (MLS) forge spikes in home prices.

Areas with less restrictive zoning and room to grow in terms of construction are doing much better at trying to meet the ever-growing demand for housing, reflected in less painful price increases — and more buyer interest from nearby, more costly metros. With no direct action to dull inventory shortages, homebuyers will continue to flock to less costly metros and migrate out of metros with raised prices.

The only real solution with demand soaring above supply is from increased residential construction. A consistent increase in construction starts is key for a healthy housing market, and the only viable long-term solution for a lack of inventory — a huge issue for metros with little space for growth.

For real estate professionals, the issue of low inventory and emigrating clients is do-or-die.

But waving goodbye to clients exiting your costly metro area is not the only viable option in terms or searching for housing. There are ways for real estate professionals to get involved without feeling as though you’re sitting idly by. Government involvement is integral for community development, and proper zoning regulations. Have a chat with your local government at city council meetings, or even get a petition going.

You can even contact local representatives to advocate for more housing by visiting the United States House of Representatives website.