Redfin Migration Report: Phoenix is the Top Destination, Particularly among Los Angelenos and People Looking to Leave Other Expensive, High-Tax Metros

May 7th, 2019

More than a third of people searching for Phoenix homes last quarter were out-of-towners

Twenty-five percent of home searchers looked to move to another metro area in the first quarter of 2019, compared to 23 percent during the same period last year. The national share of home-searchers looking to relocate currently sits at its highest level on record, tied with the fourth quarter of 2018. The latest migration analysis is based on a sample of more than 1 million users who searched for homes across 87 metro areas from January through March.

“People are feeling more confident about the economy and now feel financially secure enough to make a cross-country move to a metro where their money will go further,” said Redfin chief economist Daryl Fairweather. “Homeownership may be out of reach for current residents of San Francisco or New York, but there are plenty of affordable homes and lower taxes in places like Phoenix, Atlanta and Austin. As more workers move to these places, there is a chicken and egg phenomenon where more companies open offices, which attracts even more workers.”

Moving In – Metros with the Highest Net Inflow of Redfin Users

Phoenix re-took the number one spot on the list of metro areas, beating out Sacramento with the highest net inflow of Redfin users in the first quarter. A net inflow means more people are looking to move in than leave, while a net outflow means there are more people looking to leave than people looking to move in.

Net inflow for Phoenix hit 7,949—the highest net inflow on record not only for Phoenix, but for any metro area to date since Redfin began reporting net migration data in early 2017. The share of homebuyers searching in the Phoenix metro area from other metro areas also hit a new high of 34.5 percent in the first quarter, just edging past the previous high of 34.0 percent in the second quarter of 2018.

Phoenix Net Inflow Hit a New Record High in the First Quarter of 2019

“It is pretty rare for me to meet a home-buying client who was born or raised in Phoenix or even elsewhere in Arizona,” said Phoenix area Redfin agent Heather Corley. “So many people are coming here from expensive cities like Los Angeles, San Francisco and Seattle for our low cost of living and great weather. The trend is really increasing lately thanks to strong job growth and companies such as Allstate, Intel, Boeing, Microsoft and Facebook moving to the area.”

The big uptick in migration is beginning to have an effect on the Phoenix area. “The rise in out-of-state buyers is definitely driving prices up,” explained Corley. “We’re seeing a lot more homes for sale that receive multiple offers, and many times we’re competing with all-cash buyers.”

“Many of the buyers I work with are moving away from expensive places in California to escape high taxes, traffic, and natural disasters,” said Phoenix area Redfin agent Van WelbornVincent Shook, another Phoenix Redfin agent added: “When a California resident visits Phoenix and sees how much more home they can afford here, it really gives them something to think about. Plus, Phoenix property taxes are just so much lower.”

Table: Top 10 Metros by Net Inflow of Users and Their Top Origins

RankMetro*Net Inflow 2019 Q1†Net Inflow 2018 Q1Portion of Searches from Users Outside the Metro 2019 Q1Portion of Searches from Users Outside the Metro 2018 Q1Top OriginTop Out-of-State Origin
1Phoenix, AZ7,9496,09734.5%33.6%Los Angeles, CALos Angeles, CA
2Sacramento, CA5,9874,68441.7%39.5%San Francisco, CASeattle, WA
3Atlanta, GA5,4024,20526.2%26.3%New York, NYNew York, NY
4Austin, TX4,4472,40231.7%26.7%San Francisco, CASan Francisco, CA
5Miami, FL4,4003,02428.4%27.7%New York, NYNew York, NY
6Las Vegas, NV3,9874,18943.1%43.6%Los Angeles, CALos Angeles, CA
7Dallas, TX3,7972,31224.1%23.0%Los Angeles, CALos Angeles, CA
8Tampa, FL3,5361,80255.8%43.9%New York, NYNew York, NY
9San Diego, CA2,8172,06523.8%24.3%Los Angeles, CASeattle, WA
10Raleigh, NC2,4821,60231.1%28.3%New York, NYNew York, NY

*Combined statistical areas with at least 500 users in Q1 2019
†Negative values indicate a net outflow; among the one million users sampled for this analysis only

Every one of the top migration destinations are attracting big crowds from California and New York—two states with some of the highest tax burdens in the nation. Austin continued to draw a lot of people from San Francisco as major tech companies such as GoogleApple and Amazon all recently announced plans to expand their presence in the hip Texas city. Even when home searchers are looking to leave their metro area, they mostly tend to stick to the same coast. Phoenix and Las Vegas are primarily attracting people from Los Angeles, while Atlanta, Miami, and Raleigh are drawing people from New York.

Moving Out – Metros with the Highest Net Outflow of Redfin Users

Perennial sources of out-migration New York, San Francisco, Los Angeles and Washington, D.C., topped the list of metros people looked to leave, posting the highest net outflows in the first quarter. Net outflow is defined as the number of people looking to leave the metro minus the number of people looking to move to the metro.

Table: Top 10 Metros by Net Outflow of Users and Their Top Destinations

RankMetro*Net Outflow 2019 Q1†Net Outflow 2018 Q1Portion of Local Users Searching Elsewhere 2019 Q1Portion of Local Users Searching Elsewhere 2018 Q1Top DestinationTop Out-of-State Destination
1New York, NY26,93818,54935.0%33.9%Boston, MABoston, MA
2San Francisco, CA26,36619,88421.4%20.7%Sacramento, CASeattle, WA
3Los Angeles, CA12,93411,60715.8%15.3%San Diego, CAPhoenix, AZ
4Washington, D.C.8,5435,74311.6%10.9%Philadelphia, PAPhiladelphia, PA
5Chicago, IL4,4283,05610.1%9.3%Phoenix, AZPhoenix, AZ
6Denver, CO3,8381,09424.2%19.6%Seattle, WASeattle, WA
7Seattle, WA2,0393,06612.0%12.3%Los Angeles, CALos Angeles, CA
8Milwaukee, WI79619836.4%29.1%Chicago, ILChicago, IL
9Detroit, MI47426121.6%25.9%Chicago, ILChicago, IL
10Houston, TX43966426.3%26.4%Austin, TXLos Angeles, CA

*Combined statistical areas with at least 500 users in Q1 2019
†Among the one million users sampled for this analysis only

In each of the six metros with the largest outflows—New York, San Francisco, Los Angeles, Washington, D.C., Chicago and Denver—the total net outflow of users was up from the same period a year earlier.

Source – Redfin

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