Los Angeles, San Diego and Seattle are the Most Popular Destinations for Out-of-Towners Searching for $1M-Plus Homes

 In Real Estate News & Analysis

Redfin.com users searching for million-dollar abodes outside their home metro are also looking in vacation destinations like Miami and Honolulu. 

Twenty-four percent of Redfin.com users searching for homes priced at or above $1 million in the last year were looking to buy a home in another metro area, the same share as non-luxury home searchers. 

Los Angeles was the most popular destination for Redfin.com users searching for million-dollar-plus homes outside their metro, followed by fellow coastal areas San Diego, Seattle, Miami and Honolulu

Contrast that with the results from our most recent migration report, which shows that Redfin.com users at all price points were looking to relocate to less costly inland areas like Phoenix, Sacramento and Atlanta during the first quarter of 2019. 

Los Angeles and Seattle, two of the three most popular destinations for people searching for high-end homes, are among the metros that home searchers at all price points are most often looking to leave. And for seven of the 10 metros million-dollar-plus homebuyers are looking to leave, Los Angeles is the most popular destination.

Below is a look at the metro areas with the highest net inflow for Redfin.com users searching for $1 million-plus homes from May 2018 through April 2019, followed by a look at the metro areas with the highest net outflow for that category. A net inflow means more people are looking to move in than move out, while a net outflow means more people are looking to move out than move in. 

Metros with highest net inflow for Redfin users searching for $1M-plus homes
Metro area Net inflow for $1M-plus home searchers  Percentage of searches from users outside the metro ($1M-plus homes only) Top origin Top out-of-state origin
Los Angeles, CA 5,815 14.1% San Francisco New York 
San Diego, CA 5,619 27.8% Los Angeles Seattle
Seattle, WA 2,455 12.5% San Francisco San Francisco
Miami, FL 1,963 37.8% New York New York 
Honolulu, HI 1,407 55.5% Los Angeles Los Angeles
Boston, MA 911 13.5% New York  New York 
Nashville, TN 647 38.1% New York New York 
Cape Coral, FL 600 80% Chicago Chicago
Austin, TX 598 28.9% San Francisco San Francisco
Salinas, CA 566 73.3% San Francisco Seattle

*Combined statistical areas with at least 200 users from May 2018-April 2019

Metros with highest net outflow for Redfin users searching for $1M-plus homes
Metro area Net outflow

for $1M-plus home searchers 

Percentage of users searching in other metros ($1M-plus homes only) Most popular destination Most popular out-of-state destination
New York, NY -5,696 29.8% Boston Boston
Chicago, IL -5,123 17.3% Los Angeles Los Angeles
Washington, D.C. -4,940 13.5% Los Angeles Los Angeles
San Francisco, CA -2,564 10.4% Los Angeles Seattle
Houston, TX -1,077 38.5% Austin Los Angeles
Philadelphia, PA -1,066 27.2% New York New York 
Portland, OR -958 21% Los Angeles Los Angeles
Denver, CO -736 22.5% Los Angeles Los Angeles
Detroit, MI -667 48.3% Los Angeles Los Angeles
Fresno, CA -630 65.6% Los Angeles Seattle

*Combined statistical areas with at least 200 users from May 2018-April 2019

†Negative values indicate a net outflow; among the one million users sampled for this analysis only

Los Angeles Redfin agent Alec Traub said Los Angeles is popular with homebuyers searching for $1 million-plus homes because the market is expensive, but homes are still more affordable than they are in San Francisco and New York. “And while homes in Los Angeles may be a bit more expensive than they are in places like Chicago and Washington, D.C., many people who can afford million-dollar homes are willing to pay a premium to live where it’s 75 degrees and sunny all year long,” Traub said.

“The industries in Los Angeles also attract luxury homebuyers,” Traub continued. “There’s Hollywood, of course, which continues to bring scores of high earners to the area, but it’s also a growing tech hub, largely because it’s less expensive to rent office space in Los Angeles than the Bay Area and it’s less expensive for employees to buy or rent homes.”

Nationwide, Redfin users searching for $1 million-plus homes outside of places like the Bay Area and in other less costly coastal markets like Seattle and San Diego may also be looking to get more for their money. 

“Even buyers who can afford million-dollar-plus homes may be finding San Francisco and New York City too expensive, and are opting for slightly less expensive metros like Seattle, San Diego, Los Angeles and Boston,” said Redfin chief economist Daryl Fairweather. “Even though it may seem like home prices in Seattle, for instance, have gone up so much they must have surely peaked, there’s still room for prices to grow—as long as prices remain below San Francisco values. The same goes for Austin and Miami, which are also popular migration destinations for the wealthy because, like Seattle, they’re in states with no income tax. Local homeowners in these migration destinations may welcome an increase in home values driven by migrants from more expensive places, but renters and aspiring homebuyers are going to see their rents rise and their opportunity to become homeowners become less and less attainable.”

Another possibility is that some people searching for million-dollar-plus homes are looking for a second home rather than looking to relocate: Redfin.com users in places with cold winter climates like New York and Washington, D.C. may be searching for vacation properties in warmer locales like Los Angeles, Miami or Honolulu. 

“When I work with buyers searching for million-dollar-plus homes, about half of them are relocating to the Los Angeles area and half are purchasing a second home,” Traub said. 

Find Your Metro

Below is an interactive tool you can use to see where people searching for $1 million-plus homes are looking to purchase a home, and where they’re coming from. The tool includes more than 80 metros. Find your area using the drop-down menu:

The post Los Angeles, San Diego and Seattle are the Most Popular Destinations for Out-of-Towners Searching for $1M-Plus Homes appeared first on Redfin Real-Time.

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