If the economy somehow gains strength, it may only serve to further accelerate these trends. The incipient recovery in housing prices seems likely, at least in places like California and the Northeast, to create yet another bubble. This will give people more incentive to move to less expensive areas, particularly those who can cash in by selling a house in a pricier city and moving to a less expensive one. The differential in housing costs between New York and Tampa-St. Petersburg now stands at historic highs, and near peak bubble highs between Los Angeles and Phoenix; the traditional growth states are looking more attractive all the time for people looking to make quick money in an economy with shrinking opportunities elsewhere. This includes the massive wave of aging boomers, many of whom may see selling a house in California or the Northeast as a way to make up for less than adequate IRAs. The combination of low prices and warmer weather in the past has proven an irresistible one for those retiring or simply down-shifting their careers. This appeal is likely to grow as the senior population expands.
Other demographic factors could further drive this trend. As the millennial generation ages and starts looking for places to buy homes and raise families, many will seek out places that are both affordable and offer better economic opportunities. These will tend to be in the South and Southwest, particularly Texas, and Plains States metro areas such as Oklahoma City.
Finally we can expect immigrants, particularly from Asia, to continue to seek out housing bargains and new opportunities primarily in the Sun Belt states, as our recent study of changing Asian settlement patterns revealed. More will be shifting from the high-priced, low-growth big metros for opportunity cities such as Houston, Dallas-Fort Worth, Raleigh and Charlotte.
Overall we can expect domestic migration to pick up, and to follow the well-trodden path from the great cities of the Northeast and California to the Sun Belt’s resurgent boom towns. This may be bad news to many urban pundits and big city speculators, but it also should create new opportunities for more perceptive, and less jaded, investors.
Here are the top five cities where Americans are moving:
No. 1: Dallas-Fort Worth Metropolitan Statistical Area
Net Domestic Migration, 7/10 to 7/11: +39,021
July 2011 Population: 6,400,511
No. 2: Miami-Fort Lauderdale-Pompano Beach MSA
Net Domestic Migration, 7/10 to 7/11: +36,191
July 2011 Population: 5,578,080
No. 3: Austin, Texas
Net Domestic Migration, 7/10 to 7/11: +30,669
July 2011 Population: 1,728,247
No. 4: Tampa-St. Petersburg, Fla.
Net Domestic Migration, 7/10 to 7/11: +27,157
July 2011 Population: 2,788,151
No. 5: Houston
Net Domestic Migration, 7/10 to 7/11: +21,580
July 2011 Population: 5,976,470
Full List: The 10 Cities Where Americans Are Moving Now