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The top 10 cities where buyers want to relocate

Plus, Nashville Lands on List of Popular Homebuyer Migration Destinations and 6 more RE insights

Real Estate Trends

U.S. Location Trends in Advanced Manufacturing link

  • The U.S. is witnessing a resurgence in domestic manufacturing, driven by initiatives to establish the country as a leader in advanced manufacturing. This surge has led to increased demand for both skilled and basic manufacturing talent, which is becoming scarce, especially post-pandemic.

  • Advanced manufacturing, utilizing innovative technologies, is crucial in industries like renewable energy, electric vehicles, and semiconductors.

  • Geographically, Southeastern U.S. states are emerging as hubs for advanced manufacturing, attracting big projects due to their business-friendly environment, lower labor costs, and high quality of life.

Multifamily Development Slows as Single-Family Grows link

  • Multifamily permits and starts continued their downward trend in October 2023, with a significant 31.8% year-over-year decline in starts. However, there's a slight improvement from September, indicating a complex and evolving market scenario.

  • Single-family development is showing signs of recovery, contrasting with the multifamily sector. The rates for single-family permitting and starts are approximately 13% higher than last year, suggesting a shift in development focus.

  • The top 10 metropolitan areas for multifamily permitting experienced a collective 19% decrease from the previous year. This shift highlights changing dynamics in urban development, with cities like New York, Austin, and Dallas leading but also showing significant declines in permits.

Many Bet That the Federal Reserve Will Cut Rates Soon link

  • Financial experts are anticipating a significant cut in interest rates by the Federal Reserve. Deutsche Bank's economists predict a reduction of 175 basis points from the current federal funds rate range of 5.25% to 5.5%.

  • This anticipated rate cut would bring the federal funds target range down to 3.5% to 3.75%. The last time rates were this low was before November 3, 2022, highlighting a major shift in monetary policy.

Another Month of Negative Multifamily Rent Growth link

  • November marks the fourth consecutive month of negative growth in national median rent for multifamily properties, with a 0.9% decrease month-over-month to $1,340. This trend is attributed to low demand during the holiday season, suggesting rents may continue to decline for another month or two.

  • The year-over-year growth stands at -1.1%, contrasting sharply with the surging rent prices of 2021 and 2022, where year-over-year growth peaked at 18% nationally. Despite the current cooldown, the national median rent is still nearly $250 per month higher than it was three years ago.

Nashville Lands on List of Popular Homebuyer Migration Destinations link

  • The trend of homebuyers relocating from expensive coastal cities to more affordable Sun Belt areas continues, with San Francisco leading the outflow. Nashville enters Redfin's top migration destinations, attracting buyers primarily from Los Angeles.

  • Sacramento, CA, emerges as the most popular destination for homebuyers in October 2023, with Las Vegas and Orlando following closely. These cities offer significantly lower housing costs compared to places like San Francisco and Los Angeles.

  • About 24.7% of Redfin.com users sought to move to different metro areas in October, a slight decrease from the previous month but still above pre-pandemic levels. High mortgage rates and housing costs are influencing these migration patterns.

Home prices climb higher for 7th straight month link

  • National home prices rose 3.9% year-over-year in September, marking a continuous increase over the past seven months. The S&P CoreLogic Case-Shiller National Home Price Index shows a 0.7% rise from August to September 2023, with a significant 6.6% increase since January.

  • The housing market faces a historic shortage of homes for sale, primarily due to homeowners holding off on listings to maintain lower mortgage rates. This scarcity has driven home prices up, despite a decrease in home sales and rising mortgage rates locking many potential buyers out of the market.

  • Detroit leads the surge in home prices with a 6.7% increase over the year, followed by San Diego and New York City with 6.5% and 6.3% rises, respectively. The overall strength and breadth of the market, as indicated by these figures, suggest a potentially optimistic outlook for future housing market trends.

Rental Concessions Reach Highest Level in Over Two Years link

  • Rental concessions, like free rent or parking, hit a two-year high in October, with 30% of Zillow listings offering them. This surge contrasts with the pandemic low of 19.4% in July 2022, reflecting a shift in rental market dynamics.

  • The increase in concessions is a response to the high demand for rental housing and a significant rise in supply. Cities with construction booms, such as Washington D.C., Austin, and Dallas, are seeing more pronounced trends in rental concessions.

  • The landscape of rental concessions varies across the U.S. While Salt Lake City and San Jose see over half of rentals offering concessions, cities like New Orleans, Providence, and Miami show much lower rates, indicating diverse strategies by property managers in different markets.

Pro Member Only Content

The top 10 cities where buyers want to relocate 

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  • Homebuyers are increasingly moving out of large, expensive coastal cities to smaller, more affordable ones. In October 2023, Sacramento led with a net inflow of 5,000, down from 7,800 the previous year.

  • The Sun Belt cities, despite facing climate risks like hurricanes and extreme heat, are popular destinations. Cities like Orlando and Las Vegas saw significant inflows, with Orlando maintaining a steady inflow of 3,700 from the previous year.

  • The trend of relocating to more affordable cities is slowing down due to rising mortgage rates. Nashville re-emerged as a popular destination with a net inflow of 2,800, offering homes at roughly half the cost of those in Los Angeles.

  • link

New data show much of the US has entered the renter’s market 

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  • The rental market is experiencing a significant shift, with rent prices now lower than last year in 50 of the top 100 cities tracked by Zumper. This change is attributed to a surge in new housing supply and a slowdown in rental market growth.

  • Renters are gaining more leverage as property managers offer increased concessions, particularly in cities with a high influx of new housing. For example, in Salt Lake City, over 54% of rentals are offering concessions, reflecting the trend across major US cities.

  • link

The Small Midwest Market Where the Most Jobs and Apartments Are Headed 

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  • Sioux Falls, SD, has witnessed a remarkable surge in both job and apartment market growth over the past five years. The city's total employment now exceeds 174,000, a 9.4% increase, ranking it among the top performers in the Midwest and nationally.

  • The apartment inventory in Sioux Falls has expanded by 24.7%, adding 5,300 units since the third quarter of 2018. This growth places Sioux Falls in the top 10 nationally among the largest 150 apartment markets.

  • More growth is on the horizon for Sioux Falls, with an additional 3,200 apartment units currently under construction. These units are expected to be completed within the next 18 months, further boosting the city's housing and job market.

  • link

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