According to the latest report from Redfin, 24% of its users who were searching for a home are looking to move to a new metro area, and particularly are looking to move away from high-tax coastal markets like San Francisco, New York, and Washington D.C. Less expensive markets that are farther from the coast are starting to get more attention, and last year’s tax reform is just adding fuel to this inland-moving fire.
“By capping mortgage interest and state and local tax deductions, there is an even greater incentive for homebuyers to consider moving to a lower-tax state,” says Senior Economist Taylor Marr. These markets have been steadily expanding in the last 10 years as their job markets exploded with start-ups, but this growth is starting to stall and even reverse as home prices climb and other markets begin to catch up. Cities that have been seeing the biggest gain are Phoenix, Sacramento, Atlanta, Las Vegas, and Portland.
With cities around the nation growing in popularity both for residents and for employers, it allows affordability to be the driving factor for choosing where to live and not popularity. This will lead to demand in slower markets heating up, and maybe distributing across the country a little more evenly.