New data from real estate brokerage Redfin indicate that Sacramento topped the nation for net in-migration during the fourth quarter, while San Francisco, New York, Los Angeles, Washington, D.C. and Denver had the nation’s highest net outflows of population.
Denver flipped from modest net inflows and outflows throughout 2017 to strong net outflows through late 2018. Last quarter, 24 percent of Denverites on Redfin.com searched for homes outside the area, up from 17 percent a year earlier.
Net outflow is defined as the number of people looking to leave the metro minus the number of people looking to move into the metro. A net outflow means there are more people looking to leave the area than people looking to move in, while a net inflow means more people are looking to move in than leave.
The latest migration analysis is based on a sample of more than 1 million Redfin.com users who searched for homes across 87 metro areas from October through December.
In San Francisco, New York, Denver and Washington, D.C., outflows were up dramatically from a year earlier. Of all San Francisco Bay Area residents using Redfin, 24 percent were searching for homes in another metro, up from 19 percent during the same time period a year earlier.
Sacramento, which has been at number one or number two on the inbound migration list every quarter since Redfin’s inaugural 2017 report, was most impacted by “the affordability of homes here, especially compared to markets like the Bay Area,” said Redfin agent Jim Hamilton. “The market has softened in the Bay Area, but not as much yet in Sacramento, so buyers are moving here to capitalize on their equity and put a substantial down payment or even pay cash.”
Seattle’s net inflow surged to make it the fifth-most popular migration destination in the fourth quarter, behind nearby Portland and the relatively affordable metros — Sacramento, Phoenix and Atlanta — that have long dominated the list. Although the number of home sales in Seattle was sharply declining at the end of the year (down 22 percent in December), search interest is still high. Washington State’s lack of an income tax may be helping Seattle to continue attracting people, as new tax policies enacted just over a year ago favor areas where homebuyers can avoid hitting the $10,000 SALT cap.
“In both Seattle and Denver, prices were growing rapidly in 2017 and early 2018 to the point that buyers backed off in the second half of 2018,” said Redfin chief economist Daryl Fairweather. “However, people looking to leave high-tax metros for a city with mountain views and top-notch hiking are more likely to pick Seattle over Denver because Washington State doesn’t have an income tax. In fact, the top destination for Denverites looking to leave is Seattle.”
Overall, 25 percent of nation’s home searchers looked to move to another metro area in the fourth quarter of 2018, up from 23 percent the year before.
The national share of home searchers looking to relocate has been steadily increasing since Redfin began reporting on migration in early 2017.