Remote Work Drives Record Relocation: Affordable Metros See Biggest Migration Surge

A record 29.2% of U.S. homebuyers considered moving to a different metropolitan area in the third quarter of 2020, a significant shift largely driven by the rise of remote work. This migration trend, the highest since tracking began in 2017, reveals a clear pattern: residents of expensive coastal cities are increasingly searching for homes in more affordable inland destinations. Analysis of home search data highlights metros like Santa Barbara, Louisville, and Buffalo as the areas with the largest year-over-year increases in popularity among people relocating.

Why Are So Many People Relocating Now?

The primary catalyst for this migration surge is the widespread adoption of remote work due to the COVID-19 pandemic. With less need to live near a physical office, many individuals and families gained the flexibility to prioritize affordability, space, and lifestyle.

"Remote work has opened up a whole new world of possibilities when it comes to buying a home," said Redfin chief economist Daryl Fairweather. "Many residents of expensive areas like New York or Los Angeles couldn’t manage to afford rent and save for a home at the same time. So it’s no wonder that these folks are looking to buy homes in much more affordable places."

This trend is measured by net inflow, a key real estate metric representing the number of people looking to move into a metro area minus the number looking to leave. According to the data, net inflow to Santa Barbara, CA, increased by 124% year-over-year, followed by Louisville, KY (113%), and Buffalo, NY (107%).

Which Metros Are Gaining the Most New Residents?

The list of popular destinations is dominated by affordable areas, with one notable exception. The common draw for most is a lower cost of living.

• Affordable Hubs: Metros like Louisville (median home price of $229,000), Buffalo ($190,000), and El Paso ($183,000) offer significant savings compared to major coastal cities. Their median home prices are all below the national median of $334,000.
• The Lifestyle Outlier: Santa Barbara is an expensive outlier, with a typical home price of $855,000. Its popularity is attributed to its picturesque coastal setting and proximity to Los Angeles, making a hybrid commute feasible. “Santa Barbara has become even more popular since the beginning of the pandemic as remote workers leave dense cities for places with more open spaces and beaches,” said a local Redfin agent.

The top origins for people moving to these areas are consistently Los Angeles and New York. This has led to a competitive market in some destinations, with local homebuyers facing bidding wars against newcomers with higher budgets.

How Do Relocators' Budgets Compare to Local Buyers?

Homebuyers moving from expensive cities often have a different perspective on housing costs, which directly impacts their search budgets and local markets.

Data shows that the average maximum home search price for people moving from out-of-town was significantly higher than for locals in popular destinations:

"Out-of-towners tend to have a different frame of reference for how much a home should cost," Fairweather noted. "That means people moving in from a pricey place consider buying more expensive homes than locals, which can increase competition and prices in the local market."

For homebuyers considering a move, it's crucial to research the local market dynamics thoroughly. Understanding that your budget may be above the local average can be an advantage, but it also means being prepared for a competitive purchasing process. Consulting with a local real estate agent can provide essential, hyperlocal insight into neighborhood trends and pricing.