Portal - March/April 2021
INDUSTRY COVID-19 FOCUS
Migration Trends During the Pandemic
By Brian Limperopulos, IAM Vice President
It is that time of year again when the major van lines and some other large industry players release their move data from the previous year. I have read through the reports to see what patterns can be identified and perhaps what actions can be taken in this new post-COVID paradigm here in the U.S. For this write-up, I reviewed the following sources:
Many of these reports include detailed data about international destinations, origins, and migration patterns, but this column will focus on trends within the United States.
The More Things Change, the More They Stay the Same
Despite the disruption from COVID or perhaps because of it, these sources all show a net outflow of residents from states in the Northeast and the Great Lakes regions. This is not a new trend. Residents have been fleeing high-tax states with colder weather for states like Florida and Texas for years. However, the data shows that more people likely chose to leave New York and New Jersey in particular this year to escape the stress caused by COVID. In their report, Updater emphasized that, “Southern states have been attractive destinations for years, but spiked during the pandemic.”
While Southern states were top moving destinations, Idaho continued to stand out as the state with the highest percentage of inbound moves for the fourth time in a row according to the Atlas Van Lines Migration Report (See above). North American Van Lines data further shows that “people are fleeing California for Texas and Idaho.” When asked why they were moving to Idaho by United Van Lines, their clients overwhelmingly cited that they needed “a lifestyle change” and “cost of living” as their reasons.
Notwithstanding its high number of outbound moves, Allied reports that California still attracts a huge number of new residents because corporates are still paying to bring employees out to the Golden State.
Has the Bubble Popped for Large U.S. Cities?
A long-term trend in the U.S. has been the so-called “return to the city” where millennials and Gen Z were electing to live in big cities like New York, San Francisco, Boston, and Washington, DC. COVID seems to have reversed this trend at least for right now with city-dwellers in these urban areas fleeing to less dense and cheaper forms of living. In their National Migration Study, United shared that, “major metropolitan areas and hotspots, such as New York City (72%), Newark (72%) and Chicago (69%), experienced greater outbound migration, while lower-density cities like Wilmington, North Carolina (79%) and Boise, Idaho (75%) saw high levels of inbound moves.” Updater shared a similar finding that, “Many of America’s largest, most populated cities experienced unprecedented resident loss, while smaller markets experienced unprecedented resident gains.”
For years, rents have been skyrocketing in these large cities while the quality of life has struggled to keep up. It appears at least for now that COVID has caused many to review the value proposition of living in these cities when more space, fewer taxes, and warmer weather beckons in other states. Allied, North American, United, and Updater all reported large inflows of new residents to smaller cities in the sunbelt like Phoenix, Austin, Houston, Las Vegas, Denver, and many of the growing metropolitan areas of Florida.
Corporates in the Time of COVID
When analyzing the data, it would have been great to have more segmentation between sponsored and non-sponsored moves. Allied provides the data at a high level to show that Texas, California, and Illinois are the top three destinations for moves sponsored by corporate accounts, but there is no additional insight provided from where those individuals might be moving.
In the final analysis, the data provided by the van lines and Updater largely align with one another. The general migration trend toward the sunbelt due to climate and cost of living continues to hold true, but the pandemic undoubtedly impacted the migration patterns of Americans in 2020. Fleeing cities for more space at a cheaper rate will likely continue as employers now view remote work not just as a plausible option but as a valuable recruiting tool to enhance their teams.
It is of course difficult to predict how these trends will play out in the future but I’ll give my assessment:
Retirees and those looking for new opportunities will continue the trend of migrating to warm, low-tax states.
Families (at least of knowledge workers) will have much more flexibility to live anywhere as long as they have an internet connection. This flexibility should continue to contribute to the strong growth of places like Idaho and Colorado where the cost of living is low but that hold attractive possibilities for kids and adults alike. Growth across the sunbelt and in the mountain west will create new opportunities as towns further develop and new developments take shape to accommodate new residents.
For new college graduates, I expect them to continue to gravitate back towards cities where they can live within walking distance of friends and have easy access to all of the amenities that urban life has to offer. This prediction will either look good or bad depending on whether cities can get a handle on crime rates, which spiked last year during the turmoil of COVID.
Special thanks are due to the van lines and to Updater for making this data available.