During the second quarter of 2018, residents in in expensive, high-tax coastal markets searched online for homes where taxes are lower and housing is more affordable, according to Redfin’s latest Migration Report.
The report found that people in San Francisco, New York and Los Angeles searched most often for homes in Phoenix, Las Vegas, and Miami. Redfin’s analysis was based on more than 1 million users who searched Redfin.com for homes from April to June.
“With home prices reaching new heights in many metro areas, it’s no surprise people are continuing to move away from expensive metros in search of homeownership,” Redfin Senior Economist Taylor Marr said in a release. “Last year’s tax reform poured fuel on the fire. By capping mortgage interest and state and local tax deductions, there is an even greater incentive for homebuyers to consider moving to a lower-tax state.”
Redfin found 24 percent of home searchers looked to move to another metro area in the second quarter, compared with 21 percent one year ago. The average local tax burden was three times lower in the Top-10 migration destinations than in the 10 places people were most commonly leaving last quarter, according to the analysis.
“Now that homeowners and prospective buyers have had some time to understand how the new tax laws are affecting their finances, we are starting to see an impact on migration trends,” Marr said.
According to the report San Francisco, New York, Los Angeles, Washington, D.C. and Chicago had the highest net outflows in the second quarter.
Redfin said the top areas attracting residents looking to flee high-priced areas were Phoenix, Sacramento, Atlanta, Las Vegas, Portland, Ore. and Austin, Texas.
“Affordability definitely plays a role in home searchers considering Las Vegas as their new home city,” said Nicole Lazarski, a Redfin agent in Las Vegas. “Even though home prices are climbing fast, they have still not returned to their 2007 height. With a median sale price around $270,000 in July, plus Nevada’s low property taxes and lack of a state income tax, it’s a very attractive place for people looking to leave California and other expensive places.”