Both U-Haul and United Van Lines listed Fla. as a top destination state. NAR’s chief economist credits affordability, job creation and lower taxes for the moves.
WASHINGTON – Job-rich, low-tax states such as those in the Sun Belt are attracting many Americans as housing prices rise, different recent reports show.
Online real estate marketplace Zillow and moving rental company U-Haul both cited Florida and Texas as hot relocation destinations in separate reports, while United Van Lines listed Florida and South Carolina among the top states for inbound migration.
“Sun Belt states are more affordable and generally have a lower tax burden and more job creation,” said Lawrence Yun, chief economist for the National Association of Realtors®, the industry’s largest trade association, with 1.5 million members.
Peter C. Earle, an economist at the American Institute for Economic Research free-market think tank in Massachusetts, said “a large part” of pandemic migration will continue to be “from states that had the strictest pandemic policies toward those which were more relaxed.”
“Those states which took a more hands-off policy approaches to address the spread of COVID now have economies growing faster than those which locked down repeatedly,” Mr. Earle said. “Also, people generally want to know that they won’t be unemployed or have their business shut down overnight the next time a nasty bug comes along, and states like Texas and Florida make that possibility unlikely.”
Zillow reported last week that the Sun Belt will dominate its list of the hottest housing markets for the second year in a row. Tampa and Jacksonville, Florida; San Antonio, Texas; and Raleigh and Charlotte, North Carolina, will lead U.S. markets as housing prices rise 14% nationally.
In addition, Zillow predicted that New York City, Milwaukee, San Francisco and Chicago will see the coolest housing markets in 2022, due to fewer jobs and less favorable demographic trends. The real estate firm based its report on home value appreciation forecasts, residential building permits and home listings.
Mr. Yun of the National Association of Realtors (NAR) predicts that home prices will rise “more moderately” this year, growing by 5.7% rather than Zillow’s prediction of 14%.
Eight of the top metropolitan areas that the NAR predicts will experience stronger price appreciation this year are in Sun Belt states: Dallas-Fort Worth, Texas; Daphne-Fairhope-Farley and Huntsville, Alabama; Palm Bay-Melbourne-Titusville, Florida; Pensacola-Ferry Pass-Brent, Florida; San Antonio-New Braunfels, Texas; Spartanburg, South Carolina; and Tucson, Arizona.
Meanwhile, U-Haul reported last week in its annual Growth Index that Texas edged out Florida for the largest net gain of one-way trucks in 2021, while California and Illinois saw the greatest net losses.
Californians were leaving so quickly for Texas that U-Haul “simply ran out of inventory” to help them relocate last year, the company said.
And United Van Lines reported in its 45th annual National Movers Study that two Sun Belt states made the top five for inbound migration in 2021: South Carolina (63%) and Florida (62%) joined Vermont, South Dakota (69%) and West Virginia (63%).
States such as Illinois (67%), New York (63%), Connecticut (60%) and California (59%) appeared once again at the top of the list for outbound migration.
“The pandemic has prompted many buyers from New York, New Jersey and California to move to paradise,” said Nicol Jenkins, a Realtor based in Fort Lauderdale, Florida.
Mr. Earle of the American Institute for Economic Research said changes in the federal tax code and the recent rise in inflation have made Americans more cost-conscious than they have been in decades, making them leave “the expensive, high-tax areas of the Northeast seaboard and California for the more affordable Sun Belt region.”
“When people move, they tell friends and family, some of whom follow,” he said. “When companies move, they bring employees and families with them and motivate other companies to do the same.”
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