A combination of record-low mortgage rates, remote work policies, and other factors are driving homeowners in cities such as Seattle and San Francisco to look elsewhere for a new place to live.
Redfin published new data Thursday showing year-over-year increases in the number of Redfin users based in San Francisco, Seattle, Washington, D.C., Chicago, Denver and Boston searching for homes in other places. Overall, a record 27.4% of users were looking to move away in the second quarter.
Redfin economist Taylor Marr said the pandemic is influencing priorities and lifestyles.
“The factors driving a surge in overall homebuyer demand — low mortgage rates and changes in what people are looking for in a home—are lighting a fire in people who were already considering a move to a different area,” Marr said in a blog post. “Add in employers’ increasingly flexible remote work policies and the fact residents of many big coastal cities can’t fully enjoy their local amenities, and the people who have long wanted to live in a more affordable area or closer to family are incentivized to make the move soon.”
The portion of Seattle-based users searching elsewhere rose from 11.2% to 13.7% in the second quarter, the second-largest jump of the top 10 metros ranked by net outflow of users. The top destination for Seattle users was Los Angeles, Calif., while the top destination for San Francisco and Denver users was Seattle.
The median sale price for a Seattle metro area home in June was $615,000.
Redfin noted that some homebuyers are moving to vacation spots such as Palm Springs permanently as companies implement work-from-home policies amid the pandemic.
Redfin CEO Glenn Kelman predicted a “seismic demographic shift toward smaller cities” back in May when he said remote work could drive people to leave expensive tech hubs such as Seattle and San Francisco and look at places such as Boise, Idaho, or Bozeman, Mont.
Redfin pulled data from users who viewed at least 10 homes in a metro area, with those homes making up at least 80% of the user’s searches.
The Seattle-based real estate giant also published a separate report Thursday showing a “strong” U.S. housing market, with listing prices up 13% and closed sale prices up 6% during the four-week period ending July 12. Total number of homes for sale was down 28%, “further exacerbating the imbalance between supply and demand,” Redfin noted.
Data from Realtor.com shows 18 of the top 50 U.S. real estate metros returning to or passing pre-pandemic levels of market activity, The New York Times reported. Seattle was the “most-recovered market.”
Redfin last month resumed its RedfinNow home-buying business after pausing it due to the pandemic.
The Seattle real estate company reported $191 million in revenue, up 73%, in its first quarter earnings. It will publish its second quarter earnings report on July 30.
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