Redfin: Phoenix Ranked First Among US Metros For New Residents Added In 2020
Phoenix’s population surge continues.
According to a Feb. 4 Redfin report, the Valley recorded net inflow of 82,601 residents in 2020, the most of any metro area last year. Net inflow — a metro area’s gain in new residents after accounting for departures — is yet another measure articulating the recent population growth in central Arizona.
Dallas (76,037), Orlando (60,977), Tampa (47,000) and Austin (46,958) rounded out the top five on the Redfin list of metro areas with the most net inflow in 2020.
Among cities with the most net inflow last year, Phoenix had the second-highest median home price at $340,000, behind Austin’s $370,000, according to Redfin, and it ranked No. 1 in the nation for the year-over-year increase in the median price at 16%.
The rankings back up what Valley residents are seeing on the ground: there is no ceiling in sight for the housing market, and housing prices have been rising steadily for months. That is creating a crunch because of limited supply. Phoenix was among metros across the country with the largest decline in active listings, with a 54.6% year over year decline in January, according to a recent study by Realtor.com.
Redfin said the number of homes for sale in Phoenix dropped 18% year-over-year in 2020, according to Redfin, and construction has barely kept up with demand, with the report finding that building permits for new construction were up 18.5% year-over-year.
“Phoenix has always been popular with people moving in from out of state because of its beautiful landscape, warm weather and affordability, but 2020 was beyond anything I’ve ever seen,” Valley Redfin agent Van Welborn was quoted as saying in the report. “Remote workers realize they can keep their high-paying jobs without paying California taxes, and they’re comparing what kind of home they can get in Phoenix versus Los Angeles or the Bay Area. I’m working with one couple moving here from the Bay Area and another from Seattle; neither of them would have been able to make the move if they weren’t working remotely. The couple from Seattle paid $800,000 for a big, beautiful house.”
“But even though Phoenix is affordable compared to other places, prices have risen significantly over the last year,” Welborn continued. “Locals are having a hard time getting their offers accepted because there are so few homes on the market, and often someone from California will put in a competing offer at a higher price and waive the appraisal.”
The report said that out-of-towners moving to Phoenix in 2020 had an average housing budget of $627,000, 23% higher than the $509,000 average budget for local buyers.
The Phoenix metro gained more residents in 2020 than in any year in the past decade, according to Redfin. Last year’s movement to cities like Austin, Dallas, Phoenix and Las Vegas is part of a trend of people migrating away from large metro areas such as Chicago, Los Angeles and New York. The Big Apple lost more residents — about 275,000 — than any other metro area, according to a Redfin estimate. Los Angeles came in second with an estimated net outflow of 125,000. Chicago was third with 110,000 residents lost.
“The uptick in migration is exacerbating the severe shortage of homes for sale in 2021. In December, supply was down a record 34% year over year nationwide,” according to the Redfin report. “The supply of homes for sale is down by double digits from last year in all 10 of the nation’s most popular migration destinations, including Phoenix, Austin, Las Vegas and a handful of southeastern metros. Meanwhile, the only areas where supply is up are the places people are leaving: the San Francisco Bay Area, New York and Los Angeles.”
More than one in four Redfin.com users nationwide or 27.8% considered moving to a new metro area in 2020, which is up from 25.5% the year before.
The full Redfin report is available here.
The Phoenix Business Journal contributed to this report.