Who Is Moving, and Where Are People Moving to During COVID?
Over the past year, the pandemic’s work-from-home mandates, school closures and social-distancing restrictions inspired some people to change how they think about where they live. Anecdotal evidence suggests that as people were forced to spend more time at home, many decided to trade up for more space and at least temporarily reconsider the benefits of urban versus suburban living.
To better understand the pandemic’s impact on where people are moving to during the COVID-19 era, CBRE Research extensively analyzed U.S. Postal Service (USPS) address-change data on a local and regional level. This data shows how the pandemic has subtly shifted the landscape for anyone looking to access a talented labor force.
Sun Belt Suburbs on the Rise
At the metro level, the pandemic accelerated several long-standing American migration patterns. Net move-outs from high-cost coastal cities increased, and in high-growth Sun Belt metros—such as Charlotte, NC; Austin, TX; and Dallas, TX—the pace of net move-ins accelerated in 2020. Urban Sun Belt workforces have been growing for decades, and the pandemic appears to have added impetus to this trend.
Conversely, COVID-19 provided relief for some lower-cost, post-industrial cities—such as St. Louis, MO, and Detroit, MI—where the rate of net move-outs slowed. The employment base of many of these cities is tied to production and distribution of goods, making them less conducive to remote work and encouraging many people to stay put.
What Is the Impact of COVID-Accelerated Moving Trends?
Within metro areas, the pandemic had the greatest impact on dense urban centers. Address changes out of urban zip codes was the norm across all U.S. regions. Meanwhile, suburban, exurban and rural zip codes, on average, saw more move-ins over the past year. The two city heat maps below vividly illustrate just how pervasive the outflow from urban centers has been during the pandemic. Even metros like Austin, which continued to see net inflows of people, saw substantial move-outs from the urban core.
What explains this resident migration trend? The difficulty of social distancing amid densely packed urban communities is one reason, along with the inherent mobility of young professionals who comprise a significant portion of urban populations.
Who Is Driving American Migration Trends?
Our analysis shows that the increase in moves in 2020 was driven by young, affluent and highly educated urban dwellers. While most demographic cohorts saw minor changes in movement last year, “Uptown Individuals” were a significant outlier. This demographic group’s propensity to move increased nearly 10 percentage points in 2020, with four in 10 households changing addresses vs. roughly three in 10 in 2019.
Uptown Individuals are typically highly mobile. Many work in professional services that are conducive to remote work, and their higher incomes can easily absorb the cost of a relocation. Additionally, many people in this group are childless, allowing for flexibility to quickly change their address.
This group’s flexibility could also facilitate a return to city living once the COVID-19 pandemic is over. Certainly, some households will return to major coastal markets once urban amenities become accessible again. The lure of returning to higher-cost cities such as New York and San Francisco will be sweetened by more attractively priced rental and for-sale properties.
It is also likely that for a subset of those migrating out of urban centers, the newly acquired suburban lifestyles will have staying power. The pandemic came just as the bulk of the large and increasingly affluent millennial generation reached prime family formation age. Consequently, millennials had been trending toward more suburban residences even before COVID-19.
While some of the pandemic’s effects may be temporary, changing residential preferences—especially for young professionals in the nation’s urban areas—have very real implications for employers. In an environment where access to qualified employees is a key element of corporate real estate strategy, the emerging migration patterns from the past year provide a roadmap for companies hoping to get ahead of the shifting geography of talent post-pandemic.