LOS ANGELES — The coronavirus pandemic has many Southern California residents looking to leave for greener pastures.
A new migration report by Redfin.com analyzing its search data has found that more Los Angeles residents last year were looking into potentially moving to other, more affordable, cities nationwide.
According to the report, Las Vegas, Dallas, and Phoenix were the top out-of-state choices for Angelenos looking to relocate.
The Redfin report, released last week, found 18.1% of Los Angeles Redfin users looked to leave the county, a 1.4% uptick from the previous year.
Meanwhile, Orange County-based Redfin users looked mostly to relocate to other parts of the county, and some, about 30% of OC users, looked to Los Angeles County. Riverside and San Bernardino were other areas.
Redfin Lead Economist Taylor Marr said the record low mortgage rates, remote work policies, and affordability are the main reasons many Angelenos and people nationwide were looking to relocate.
"A lot of people leaving L.A. County are suburbanizing in Riverside County and San Bernardino and finding affordable housing there," Marr said. "But those looking to leave the metro entirely, they are looking at Las Vegas, Austin, Phoenix where housing is much more affordable and they can get more space for their money."
The report comes as the coronavirus pandemic continues to fuel the red-hot housing market nationwide. Redfin estimates, with mortgage rates expected to remain historically low in the 3% and below rate, and some employers allowing employees to work remotely, 14.5 million Americans will relocate in 2021.
Redfin has been conducting a migration study for the past five years. Marr said the migration report gives people a better sense of an area's housing demand or current state.
Redfin's migration report found that a record 30% of its users seriously searched for a new home in a different metro in the fourth quarter, a 16% uptick year-over-year.
Austin was the most popular searched destination nationally, along with Las Vegas, Phoenix, Sacramento, and Dallas, rounding up the top 5. Other places in Redfin's top 10 include Atlanta, Nashville, Tampa, Cape Coral, Fl. and Miami, Fl.
Austin, Las Vegas, and Phoenix come as no surprise, given the average housing price in those areas are $370,000, $345,000, and $342,000, respectively. Meanwhile, the median home price in Los Angeles is $701,000. The median price of a home in Orange County is $795,000.
But there's a drawback. Many locals in Austin, Las Vegas, and Phoenix have reported that with so many out-of-towners and remote workers moving in, it's driving up home prices and pushing them out. Home prices in Austin increased by 15% from December 2019 to December 2020. According to reports, Las Vegas home prices jumped 10% year over year, and Phoenix homes also jumped double digits last year and are expected to increase 11% this year.
According to another Redfin study, Californians' home buying power is more than 30% of locals in some cities.
"As these markets see an influx of remote coastal workers that bring their large income with them, it's somewhat gentrifying these areas, and it's pushing up home prices," Marr said. "There's a lot more competition in areas where it wasn't as fierce as before. Some homes are selling for $100,000 more than asking, and there are more bidding wars."
Marr said not to expect the housing market in these major markets to cool down anytime soon. With a vaccine for the coronavirus rolling out and employers create new work from home policies, Marr expects more people to relocate.
"A lot of people weren't able to jump on this movement [of relocating] last year, but they might be this spring and summer as they adjust to this new normal," he said.