Homebuyers fleeing big cities during the pandemic
Popular second-home destinations including the Jersey Shore, Cape Cod, Lake Tahoe, Palm Springs and Bend, OR are heating up and becoming full-time residences for homebuyers who have the luxury of working remotely, according to a new report from Redfin, the technology-powered real estate brokerage. Redfin’s ranking is based on year-over-year change in home prices, home sales, the share of homes that sold above their list price, the speed of home sales and Redfin.com searches.
Top 10 Counties Heating Up
El Dorado County, CA, a region spanning from the eastern outskirts of Sacramento to the southern half of Lake Tahoe, came in first place for the second time in a row, while the adjacent Placer County made the top 10 as well. Both are in the Sacramento metropolitan area, which was the most popular destination for homebuyers looking to relocate in the third quarter, according to an analysis of Redfin.com users. San Francisco was the top origin for out-of-area buyers looking in Sacramento. One other California market—Riverside County, which is home to the desert resort city of Palm Springs—also ranked in the top 10.
Deschutes County, OR, which is about four hours southeast of Portland, nabbed the number-two spot. With access to the Cascade mountains, millions of acres of national forest, and the vacation towns of Sunriver and Bend, the area is especially popular among hikers, bikers, fishermen, skiers and snowboarders, according to local Redfin real estate agent Angelica Webb.
“We’ve always described Bend as a second-home town, but now we’re seeing it transition into a place where more people are living full time because they’re no longer required to go into the office. We joke that it is becoming a `Zoom town,’” Webb said. “A lot of folks are moving to Bend without having ever stepped foot here. They’ve heard good things and want to get out of their cramped San Francisco or Seattle apartments, so they’re coming here and buying awesome, 3,000-square-foot colonial homes.”
The Jersey Shore, a popular summer getaway for East Coasters, has also become a hotspot for families looking to escape big-city life during the pandemic. Three of the four New Jersey counties that ranked in the top 10—Ocean County, Monmouth County and Cape May County—are on the Jersey Shore.
“I’ve never seen so many New York license plates at open houses in Monmouth County,” said local Redfin real estate agent Anthony Gonzalez. “City folks are coming to New Jersey with New York salaries, and they can get quite a deal here even though competition is fierce. One of my buyers recently lost out on a house because another bidder paid $75,000 over the asking price. Who does that? New Yorkers.”
There are a lot of homebuyers coming to the Jersey Shore from Brooklyn, specifically, according to Gonzalez.
“Where in Brooklyn can you find anything for $500,000? Nowhere,” Gonzalez said. “New York folks are coming to Jersey for a year or two, buying a house on the water and working from home at the Jersey Shore.”
Top 10 Counties Cooling Off
Meanwhile, most of the bottom 10 counties are home to dense, relatively expensive cities, including New York, San Francisco and Boston.
Queens County, NY ranked first on the list of U.S. housing markets that are cooling down, followed by Kings County, NY (Brooklyn) and Bronx County, NY (the Bronx). All three are in New York City, which saw a greater net outflow of Redfin.com users than any other metro area during the third quarter.
Hudson County, NJ, also in the New York City metro, made it into the bottom 10 as well. Located just across the Hudson River from Manhattan, the area has long been a popular home base for families who want to be close to New York City without New York City prices.
But now that remote work has become the norm for so many people, a lot of homebuyers are pushing further south into New Jersey, to places like Monmouth County and Ocean County, Redfin agents say. Suddenly, they are realizing that it is no longer necessary to pay top-dollar for crowded buildings with shared amenities that are close to the city.
Almost 47,000 more Redfin.com users looked to leave New York state than move into it during the third quarter, roughly 35% more than the 35,000 home searchers looking to leave during the same time period last year, according to an October Redfin report. The story was similar in California, where nearly 53,000 more Redfin.com users looked to move out than in.
San Francisco, which ranked number six on the list of counties that have cooled the most over the past year, has seen an especially large outflow of residents. Almost a quarter of Redfin.com users in San Francisco searched for homes outside of the metro in the third quarter, up from roughly 21% during the same time last year.