The real estate market is complex and varies based on individual regions, cities, and towns. Trends across the nation, from rising interest rates to inflation, significantly impact real estate transactions for buyers, sellers, and investors. Specific companies set out to track the patterns these changes create in the real estate world, from rising interest rates and decreasing home inventory to migration patterns. Today, we’ll look at The Allied Magnet States Report, which determines migration patterns throughout the US and provides valuable insight into how many people moved in a specific year.
Despite a continued increase in the US population, fewer people moved in 2022 than in previous years, a 20% loss. This trend has increased since the pandemic, which saw large populations moving thanks to low-interest rates, remote work opportunities, and the desire for increased space. Since then, the country has experienced increased rent and interest rates, inflation, and wage decreases, meaning more people are choosing to stay put than in recent years. Many that chose to relocate headed south to settle along the Sunbelt, where they found more robust economic opportunities and a lower cost of living.
Despite a continued increase in the US population, fewer people moved in 2022 than in previous years, a 20% loss. This trend has increased since the pandemic, which saw large populations moving thanks to low-interest rates, remote work opportunities, and the desire for increased space. Since then, the country has experienced increased rent and interest rates, inflation, and wage decreases, meaning more people are choosing to stay put than in recent years. Many that chose to relocate headed south to settle along the Sunbelt, where they found more robust economic opportunities and a lower cost of living.
Inbound and outbound migration trends
The following states saw the most significant increase in inbound residents in 2022:
Top inbound states last year
- Arizona, with an increase of 66%
- South Carolina, with an increase of 66%
- North Carolina, with an increase of 64%
- Tennessee, with an increase of 64%
- Texas, with an increase of 54%
Florida is among the highest inbound states, with a whopping 318,855 people migrating to the Sunshine State and an increase of 1.9% within the year. This trend indicates that the Southern region of the US continues to be the most popular for migration.
What makes these states so popular for new residents? Their affordability factors are significant, as inflation and increased prices nationwide give Americans a reason to find financial security. This also explains why states like California lost residents to smaller states. Despite California’s robust economy, the state has a significantly higher cost of living and has seen a decrease in wages.
States like Texas saw negligible growth, with a decrease of 6.4%. However, the lower cost of living and increasing wages make it a much more attractive option than states along the West Coast. At the same time, Arizona saw an increase in home prices throughout 2022, likely due to increased housing demand.
It’s important to note that this surge in demand and population did cause an increase in prices overall, which may make the region less attractive in the coming years.
What makes these states so popular for new residents? Their affordability factors are significant, as inflation and increased prices nationwide give Americans a reason to find financial security. This also explains why states like California lost residents to smaller states. Despite California’s robust economy, the state has a significantly higher cost of living and has seen a decrease in wages.
States like Texas saw negligible growth, with a decrease of 6.4%. However, the lower cost of living and increasing wages make it a much more attractive option than states along the West Coast. At the same time, Arizona saw an increase in home prices throughout 2022, likely due to increased housing demand.
It’s important to note that this surge in demand and population did cause an increase in prices overall, which may make the region less attractive in the coming years.
Top outbound states last year
- Illinois, with a decrease of 65%
- California, with a decrease of 62%
- New Jersey, with a decrease of 61%
- Michigan, with a decrease of 59%
- Pennsylvania, with a decrease of 59%
The states listed boast major metropolitan areas with repeated patterns of unemployment figures. While many of these states, like Illinois, Michigan, and Pennsylvania, are relatively inexpensive, they have experienced slow job growth compared to southern states. New Jersey has seen exponential job growth, but living costs are more expensive, which explains why many are migrating away. Additionally, rising interest rates and economic uncertainty have put homeownership out of reach for many, especially in larger cities like New York City and Anaheim.
These cities and their subsequent states have homes well above the national average, with New York City boasting a 119% increase and Riverside clocking in at 73%. While some cities, like Chicago, feature housing markets within the national average or below, other factors are at play. Suburbs are becoming more attractive than larger cities, which struggled to attract new residents last year. In addition to New York City and San Diego, other areas like Philadelphia, Detroit, Los Angeles, and Washington D.C. saw significant population losses.
These cities and their subsequent states have homes well above the national average, with New York City boasting a 119% increase and Riverside clocking in at 73%. While some cities, like Chicago, feature housing markets within the national average or below, other factors are at play. Suburbs are becoming more attractive than larger cities, which struggled to attract new residents last year. In addition to New York City and San Diego, other areas like Philadelphia, Detroit, Los Angeles, and Washington D.C. saw significant population losses.
Why people are choosing to migrate
There are many reasons why people choose to migrate to other areas. Housing prices, inflation, economic reduction, personal preferences, job relocations, and unforeseen circumstances like the COVID-19 pandemic are common factors that can influence a person’s decision to move.
Working from home has increased in popularity over the past few years, allowing Americans the option to stay in the city or move elsewhere. Many settled in the suburbs, allowing for cheaper housing, a lower cost of living, better access to outdoor recreation, and an overall higher quality of life.
Before the pandemic, trends indicated that Americans purchased homes not far from their original location. Now, people have expanded nearly 50 miles outside of their original region. This shift is expected to continue in the foreseeable future as more Americans seek a respite from metropolitan life in favor of somewhere sunny and less crowded.
Working from home has increased in popularity over the past few years, allowing Americans the option to stay in the city or move elsewhere. Many settled in the suburbs, allowing for cheaper housing, a lower cost of living, better access to outdoor recreation, and an overall higher quality of life.
Before the pandemic, trends indicated that Americans purchased homes not far from their original location. Now, people have expanded nearly 50 miles outside of their original region. This shift is expected to continue in the foreseeable future as more Americans seek a respite from metropolitan life in favor of somewhere sunny and less crowded.
What does this mean for the real estate market?
While these trends show migration patterns nationwide and indicate why Americans have chosen specific regions, the country’s real estate market is booming regardless of the location. Housing inventory remains low, although we may see an increase in areas with heavy negative net population growth. At the same time, home values are still rising, providing an excellent opportunity for those looking to sell their homes. However, buyers may be at a disadvantage in many areas of the country.
If you’re interested in purchasing a home, you can combat the seller’s market by being prepared. Know how much home you can afford, ensure your credit is in good standing, save for a substantial down payment to make your purchase easier, and, most importantly, work with a trusted local real estate specialist.
If you’re interested in purchasing a home, you can combat the seller’s market by being prepared. Know how much home you can afford, ensure your credit is in good standing, save for a substantial down payment to make your purchase easier, and, most importantly, work with a trusted local real estate specialist.
Are you ready to work with a skilled real estate agent?
If you’re ready to look at homes for sale in Glencoe, IL or in Arizona or want to sell your home, contact real estate expert Karen Stroble today for a consultation. A top industry professional since 2007, Karen knows what it takes to successfully buy and sell homes in the area.
