So, it turns out the pandemic and concurrent social unrest really did create a kind of exodus from America's high-cost, large metro areas, although it seems to be abating.
An updated report from the Federal Reserve Bank of Cleveland says that net migration out of those areas was 50,000 people per month in the first three months of 2021, down from a high of 56,000 per month in the last three months of 2020 (including a high of 75,000 in November 2020 alone).
The research is the work of Cleveland Fed policy economist Stephan Whitaker. The report was first released in February and then updated in late May. He uses a nationally representative anonymous random sample of 5% of U.S. consumers with a credit file, a sample of more than 10 million adults.
Whitaker said that since approximately 9 of 10 adults have credit records, that's more representative than data that reflects only homebuyers or clients of, for instance, a moving company. Everyone has their own reasons for moving, of course, including just to get out of the cold, but when there are enough going in one direction or another, it's worth real estate investors' time to take notice.
Tennessee, California, and Florida markets attracting new residents
The report finds that the Tennessee metro areas of Chattanooga and Knoxville are now among the top destinations, while five metro areas have received net migrants equivalent to more than 1% of their workforce during the pandemic: Stockton and Oxnard, California; Fort Myers and Sarasota, Florida; and Boise, Idaho.
Whitaker also finds that while net out-migration from urban neighborhoods has begun to decline along with the pandemic, in the first quarter it remained 217% higher than the average from the three years before the pandemic.
The report also finds a lot of movement in general. "Most major metro areas followed the national trend of increasing outflows and increasing inflows, including New York, San Francisco, Chicago, Los Angeles, Miami, San Diego, and San Jose, California," Whitaker writes.
"In Boston, Denver, Seattle, and Washington, D.C., the four-quarter moving average of outflows continued to increase, but the moving average of inflows did not display a clear increase."
People moving out, people moving in
In the Cleveland Fed's release on the original report, on Feb. 5, Whitaker also provides this interesting rundown of the narratives that led to the urban flight:
"Initially, the urban exodus stories reported that people were afraid of contracting the novel coronavirus in elevators and subways. Then the narratives suggested remote work had freed office workers from long commutes, allowing them to relocate. With both remote workers and students at home full time, a desire for home offices purportedly rose, and low interest rates made buying a larger suburban home attractive.
"Urban amenities such as restaurants and theaters were shuttered. Later, the protests sparked by the killing of George Floyd and others were cited for motivating some urban residents to leave. Most major cities experienced increases in violent crime during 2020, and crime rates have historically predicted migration changes. The proposed and enacted cuts to police funding were also cited as a reason to leave by some people who feared that crime would increase further."