Housing Migration

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Hundreds of thousands of Americans are fleeing the expensive cities of the Northeast and California for more affordable places like North Carolina, Tennessee and Nevada.
The northeast lost more than 1.2 million residents between 2000 and 2004 while the South gained nearly 1.7 million, according to the Census Bureau’s recent report on domestic migration. The Midwest and Pacific regions also shed residents, with California alone losing nearly half a million residents to the

Hundreds of thousands of Americans are fleeing the expensive cities of the Northeast and California for more affordable places like North Carolina, Tennessee and Nevada.

The northeast lost more than 1.2 million residents between 2000 and 2004 while the South gained nearly 1.7 million, according to the Census Bureau’s recent report on domestic migration. The Midwest and Pacific regions also shed residents, with California alone losing nearly half a million residents to the South and Southwest.

“People coming out of urban coastal areas are kind of like refugees,” says John Schleimer, founder and president of Market Perspectives, a Roseville, Calif.-based real estate consultant firm. When they move to the South, “they find they can twice or three times the house for sometimes half the money.”

The biggest losers in the battle for population also happen to have some of the highest home prices in the nation: New York, California, Illinois, Massachusetts and New Jersey. (The losses are often offset by an influx of foreign immigrants who aren’t included in the Census Bureau study.)

Each year of the study 11 out of every 1,000 New Yorkers moved out of their city, where the average home cost $449,000 last year. During the same period, for every 1,000 residents of Pheonix, 14 new ones moved in to the area, where houses cost $247,000 last year.

The low prices attract waves of migrant suburbanites, but, ironically, the influx then drives prices up. The average home price in Pheonix is up 62 percent in the last two years.

While Florida remains the biggest winner: each year it gains 190,000 new residents. (The figures reflect net gains, meaning 190,000 more new residents than residents who moved out.) Still, there are signs Florida is losing its luster. A new class of domestic immigrants known as “halfbacks” have given up on Florida. After they retired there from Northeastern, they moved halfway back, often so they can be a day’s drive from family.

Dan Owens, a consultant to developers who runs the website Retiresouth.net, says many new retirees move to Florida, have fun for a few years, then grow weary of its high prices, congestion, year-round hot weather, hurricanes and nightlife culture. “Sometimes when you get a little older, you like the way things used to be,” he says.

Housing prices are just one factor in any person’s decision to move. Economists have found everything from the temperature in January to unemployment rates influence the choice. Historically jobs (or the hope of them, anyway) have driven Americans to great migrations such as the California Gold Rush.

The fact that Americans are moving thousands of miles to get a more affordable house is just another indication of how important home prices have become. According to the National Association of Realtors, residents of the South typically spend 20 percent of their income on housing, compared to 35 percent for those in the Pacific and 25 percent for those in the Northeast.

“In the past people moved away from places because of job opportunities or layoffs, either very heavy pushes or pulls, but not because of sharp differences in housing costs,” says Frey. “Moving is not fun for most people.”

These new migrations have caused some to wonder whether the new migrants will change the culture of their destination or be changed by it.

Schleimer, who owns a second home in Mississippi, says blue state liberals should be prepared for a shock: “You’re probably going to have to start going to church more because nothing’s open and you cant buy a bottle of booze on Sunday.”

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