posted on 11 December 2016
Homeowner Mobility Down By A Third Over Last Three Decades And State-to-State Migration At 15-Year Lows
-- this post authored by Kristine Yao
CoreLogic has a new source of data for analyzing household demographic trends over time. Various data sets, including property tax records and recorded sale transactions, were linked to distinct consumers, tracking them chronologically through their chain of home purchases.
The consumer-pinned dataset offers a valuable complement to traditional sources of demographic data, which typically come from the U.S. Census Bureau. It also has certain advantages over traditional sources; the data is frequently updated - weekly in some counties - and can be drilled down to individual census blocks or parcels. This new source data has provided enhanced insight into different topics such as the return rate of boomerang buyers1 and the focus of this blog - homeowner mobility and migration trends.
Analysis of the data shows homeowner mobility declining steadily over the past three decades (Figure 1). The median length of time between recorded purchase and subsequent sale of a home was 6.6 years in 2015 compared to 4.4 years in 1985. The trend is similar to the latest data reported in the Current Population Survey by the U.S. Census Bureau which shows 5.1 percent of owner-occupied households moved between 2014 and 2015, down from 9.2 percent between 1987 and 1988.
For homeowners on the move, the majority - 61 percent - stayed within the same metro in 2015, while the shares of those moving out of state fell to 24.6 percent and were at 15-year lows (Figure 2). Movers staying in the same metro were more likely to trade up in homes and paid a median price difference of $61,000 more for their subsequent home over the selling price of their prior home in 2015. Movers to a different state, on the other hand, paid roughly the same price as what they sold for.
Of the homeowners moving out of state, more of them sold in high appreciation, high cost areas and bought in lower appreciation, more affordable areas. California had the largest number of out-migrants in 2015. The median sell price for these movers was $495,000, compared with a subsequent purchase price of $315,000 in other states. This resulted in an equity gain of 36 percent. Although the California transplants moved to less expensive homes, the median home was priced in the 77th percentile of homes in the new metro area, a 15-percentage-point increase over the prior California residence.
Figure 3 shows a chord diagram tracking the interstate migration flows of homeowners in the top sources and destinations of moves from 2000 to 2015. Based on the top ten states with the most in and out migration of owners during this period, New Jersey ranked highest in the ratio of owners moving out to owners moving in (2.64), followed by California (2.53), Illinois (1.79), Virginia (1.37), Colorado (1.18) and Pennsylvania (1.12). Conversely, in the remaining four states - Texas (0.95), Florida (0.92), Arizona (0.75) and North Carolina (0.72) - more owners were moving into the state than leaving.
Some of the implications of declining household mobility include lower sales levels and tighter inventories. It may also have a negative impact on the home improvement sector. According to Harvard’s Joint Center for Housing Studies’ 2015 report Emerging Trends in the Remodeling Market, “households tend to spend more on improvements both when they are putting their homes on the market and during the first several years after purchase." On the flip side, homeowners have more time to build up equity, which, all things being equal, lowers the risk of default.
1 See “Boomerang Buyers Making a Gradual Return" http://www.corelogic.com/blog/authors/kristine-yao/2016/07/boomerang-buyers-making-a-gradual-return.aspx
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