As a result of the pandemic, consumer preferences in the housing market shifted dramatically and trends that would have typically taken years to solidify were accelerated.
When cities shut down and companies switched to remote work, most prospective homebuyers were on the hunt for the same things: lots of space in affordable markets with few people.
These factors held a strong influence over where homebuyers migrated in 2020, according to a new report from CoreLogic.
“What we saw over the past year, the pandemic year, was that a lot of families chose to move out of the urban core and move to locations where the cost of living is lower and where they could obtain more space,” Frank Nothaft, chief economist for CoreLogic, told Inman.
Per the report, the U.S. metros that saw the highest inbound migration were Riverside-San Bernardino-Ontario in California, Lakeland-Winter Haven in Florida, Myrtle Beach-Conway-North Myrtle Beach in South Carolina, Las Vegas-Henderson-Paradise in Nevada, and Tampa-St. Petersburg-Clearwater in Florida.
In comparison to larger and historically more popular coastal markets, like New York City, the top five metros offer things like lower costs-per-square-foot, lower property taxes and a lower population density.
On the contrary, the U.S. metros that saw the highest outbound migration were New York-Newark-Jersey City in New York and New Jersey, Los Angeles-Long Beach-Anaheim in California, San Francisco-Oakland-Berkeley in California, San Jose-Sunnyvale-Santa Clara in California, and Washington-Arlington-Alexandria in the D.C. area.
The reason California dominated both sides of the list, Nothaft explained, was because buyers wanted to remain in the state but move away from the expensive markets like Los Angeles and San Francisco.
“One of the interesting trends in Southern California was the movement out of Los Angeles,” he said. “For those who wanted to still stay in Southern California, the places to buy were Riverside and San Bernardino. The price of housing is so much lower; it’s not low by U.S. standards, but it’s so much lower than trying to buy in LA or along the coast in Orange County or San Diego.”
Those smaller, more affordable markets have been growing in popularity in recent years, but the pandemic pushed them to the top.
According to the report, most moves happened between April 2020 and December 2020, when pandemic restrictions were still crippling most of the country.
The turn to remote work gave many employees the opportunity to explore cheaper markets that were farther away from their offices. In addition, the drastic and sudden changes to everyday life, like lockdowns and school closures, made the need for more space dire.
“Families needed to have space for the office at home. They also needed space for the classroom at home,” Nothaft said.
“The pandemic created a perfect recipe for consistently employed Americans,” Archana Pradhan, CoreLogic’s principal economist, was quoted in the report. “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.”