Among Americans searching for new homes, about 25% really want to get out of Dodge.
According to a new report by Redfin, one-quarter of potential home buyers are looking to relocate to a completely new metro area. The real estate brokerage company collected data from over 2 million home searches among its users, who browsed houses online in over 100 metro areas between April and June of 2023.
Where were these people looking to move? In most cases, they’re being drawn to warmer, more affordable cities with lower tax rates.
Redfin compiled a list of the top 10 cities where the number of people looking to move in was greater than the number looking to move out. The real estate site calculated a number for each city’s “net inflow” — the number of people looking to move into a city, minus the number looking to leave.
Here are the cities drawing the largest number of home searchers, counting down from 10th place.
10. Houston, Texas
Subtract the number of people looking to leave Houston from the number who want to move there, and you still end up with 3,600 flowing in. Who are these people hoping to settle in this Texas city? Redfin found that most out-of-town buyers looking for homes there are from New York.
This city’s big draw is its affordability. The average house price in Houston is $341,500, while the average in New York is $800,000. Plus the homes there are newer. The age of the average home is 41 years, while the average house in New York was built 70 years ago. And Texas is an attractive place to work because the state doesn’t tax residents’ incomes.
On the other hand, home buyers in Houston will have to pay higher property taxes — at least if they’re coming from New York. The average property tax rate in Houston ends up being 2.31% of a property’s assessed fair market value, versus 0.8% in New York City. But if your mortgage payment is half of what it was in New York, you probably don’t mind so much.
9. Miami, Florida
Miami’s net inflow (3,700 people) was similar to Houston’s, and the city is also drawing lots of home searchers from New York.
This southern city is so desirable because, while the average home price ($587,500) is more expensive than other southern cities, it’s still more affordable than in New York ($800,000). Florida doesn’t tax residents’ incomes, either. And if you want all the big-city amenities plus year-round warm weather, you’ll get that here.
But Miami is the fourth most expensive place to live in the U.S. right now. So even if you pay less for your house, you’ll still have a high standard of living to contend with. As sea levels rise, you may also have to contend with stronger hurricanes and more frequent flooding, especially if you’re not in a position to buy a house on higher ground.
8. Dallas, Texas
Redfin found that the net inflow to Dallas was 4,100 people. Most out-of-town buyers looking for homes in Dallas are from Los Angeles.
The difference in housing affordability, compared to Los Angeles, is frankly ridiculous. The average home price in Dallas ($454,525) is less than half of the price in Los Angeles ($975,000). And again, Texas levies no state income tax on residents. And the cost of living is low compared to other urban areas.
However, Dallas has some of the highest property taxes in the country. Also, Dallas is growing fast (at a rate of 0.81% annually), and as more people move in, that ultimately can drive up housing costs and create a need for better infrastructure.
7. Cape Coral, Florida
This city near Fort Myers has the same net inflow as Dallas, but most of the out-of-towners looking for homes here are from Chicago.
The warm weather and beaches are no doubt a big draw for home searchers, especially if they’re coming from cold climates like Chicago. The average home price in this city is a not-bad $404,695. And while that’s higher than Chicago’s $360,000, new residents of Florida may make up some of that in taxes, since Florida doesn’t take an income tax from its residents.
Climate change is coming for places like Cape Coral, which is a low-lying area. Hurricanes and flooding are a real and present threat. Also, Cape Coral is an area that caters to older citizens, so there’s less to do for younger people. Along with that, the jobs here don’t pay that well, so the cost of living may be a factor.
6. North Port-Sarasota, Florida
In the second quarter of 2023, Northport and Sarasota, Florida had a net inflow of 4,700 people looking to move here. The most common origin of the interested home buyers was New York.
Sarasota just topped U.S. News and World Report’s list of the top places to live in the income-tax-free state of Florida. The houses are more affordable, with the average price of a house in Sarasota being $475,000 and $387,00 in Northport — both of which are much lower than New York home prices. Plus, there’s great job growth in the area.
Unfortunately, the city is vulnerable to hurricanes and tropical storms from both the Gulf of Mexico and the Atlantic Ocean. Also, healthcare and food costs are higher than average here.
5. Sacramento, California
California’s state capitol had a net inflow of 4,800 people, most of whom hailed from nearby San Francisco.
What makes this place so desirable? Just do the math! The average home price is $475,000, while the average price in San Francisco is almost three times higher, at $1,405,000. If you can work remotely, why wouldn’t you move less than two hours away to find a relative bargain on a home?
Of course, there are some downsides: a high tax rate, a pervasive homelessness issue and urban sprawl all count among the cons.
4. Orlando, Florida
Redfin found that the net inflow into Orlando was 4,900 people, and most of them hailed from New York.
Well, it is the home of the happiest place on Earth, if you’re a Disney fan. The average home price in Orlando is $390,000. If you’re moving from Manhattan, that’s significantly less than the average home price there, which is $1,275,000. And no state income tax.
You can also count on traffic, extreme summer heat and the occasionally deadly tropical storm, leading to higher rates of flooding. And this place is, of course, teeming with tourists year-round.
3. Tampa, Florida
This coastal city had a net inflow of 5,000 home seekers, most of whom hail from New York.
Warm weather and beaches are a big draw for Tampa, especially from people in cold climates who are able to work remotely. And compared to cities like New York, the average home price in Tampa ($445,000) is a bargain.
The downsides include tropical storms and hurricanes, which can cause real damage to your home. Just the potential for them drives up insurance costs. You’ll have to budget for the costs of repairs due to flooding. And then there are the usual Florida city factors: traffic, heat and pests.
2. Phoenix, Arizona
Redfin found that Phoenix had the second-highest net inflow — of 5,300 people. The most common origin of interested home buyers was Seattle.
This is no surprise. Natural beauty, outdoor opportunities and a low cost of living have all combined to attract lots of new home buyers to Phoenix. Plus, the homes are relatively affordable. The average home price in Phoenix is $440,000, which is significantly lower than the average home price in Seattle ($825,500).
But climate change is a factor — the weather is becoming ever more extreme. Phoenix just endured the hottest month for any U.S. city, with 31 consecutive days at 110 degrees Fahrenheit or higher.
1. Las Vegas, Nevada
And the winner is … Las Vegas, which tops the list of attractive cities for out-of-state home buyers (with a net inflow of 5,700 people). Most of those home seekers are from Los Angeles.
The median home price in Las Vegas is $412,250, less than half the median price of a home in Los Angeles ($975,000). Plus, there are tech jobs to be had, the city is about to get a new NFL team, there’s no state income tax, and for Angelenos worried about losing access to nightlife and entertainment — well, this is Vegas, baby! There’s plenty of that here.
The cons? Last month, the average temperature in Las Vegas was 97 degrees. Some residents say there isn’t much of a community feel to the city and the schools aren’t great.
The Cities That People Are Leaving
The home searchers considering a move out of state tend to hail from areas where the standard of living (and average home prices) are very high. Redfin also created a list of these cities — the ones with the greatest “net outflow.”
Here are the cities with the greatest number of home searchers looking to leave, along with their net outflow numbers:
San Francisco: 28,100
New York: 24,200
Los Angeles: 20,900
Washington, D.C.: 15,700
Hartford, Connecticut: 3,500
As people begin to flee expensive cities like San Francisco or New York, will the house prices there begin to come down? Not so fast — at least in California. Based on analysis done for the California Association of Realtors, some experts expect the demand for houses to stay strong — which will keep the prices up.
Ah, well. Viva Las Vegas, then!