Phoenix, Dallas, and Orlando, Fla., were the most popular migration destinations of 2021, according to a Redfin report. With home prices up roughly 30 percent in certain Sun Belt hotspots, some locals are getting priced out and some relocators may have second thoughts.
Redfin estimates the Phoenix metro area gained roughly 85,000 residents from other metro areas in 2021, far more than any other metro, while Dallas gained about 56,000 and Orlando gained about 53,000.
Nine of the 10 most popular migration destinations of 2021 are in the Sun Belt, and half had a median home-sale price under the national median of roughly $383,000 in December. But while hundreds of thousands flocked to Sun Belt cities last year in search of affordability, housing costs are rapidly rising. Home-price growth was well above the national growth rate (15 percent year-over-year) for all 10 of the most popular destinations in December.
“Moving across the country is now easier for many Americans, thanks to remote work. That cultural shift is here to stay,” Redfin Deputy Chief Economist Taylor Marr said in a release. “What’s changing is the affordability of the most popular destinations. Some locals are getting priced out of places like Phoenix and Austin as the cost of housing and other goods and services go up. New construction tends to be robust in sprawling Sun Belt cities, and local governments ought to continue to prioritize building new homes to keep up with ongoing demand.”
In Phoenix, the typical home sold for $435,000 in December, 28 percent more than a year earlier. The other top migration destinations include Dallas (median home price $385,000, up 20.3 percent year-over-year), Orlando, Fla. ($356,000, up 22.8 percent), Atlanta ($350,000, up 22.8 percent), Tampa, Fla. ($338,000, up 24.3 percent), Austin, Texas ($482,199, up 30.3 percent), Las Vegas ($399,400, up 24.8 percent), Charlotte, N.C. ($357,000, up 20.4 percent), Denver ($540,000, up 19.5 percent), and San Antonio ($308,600), up 18.7 percent.
Out-of-towners with big budgets are helping fuel the rapid price growth, according to Redfin. In eight of the 10 most popular destinations (the two Florida metros are the exception), the average out-of-towner’s budget was at least 15 percent higher than the average local’s budget in the first quarter of 2021.
“Sellers are listing their homes at higher prices than ever before, partly because of huge demand in the last year from out-of-towners,” Austin Redfin agent Barb Cooper said. “I recently had a couple looking for a 2,000-square-foot home anywhere in the Austin area for under $300,000. I had to tell them it doesn’t exist.”