Data Shows a Net Outward Migration from Core to More Affordable Adjacent Counties

The CoreLogic Loan Application Database offers a unique opportunity to analyze the most recent homebuyer mobility and migration trends. Based on the data, among the Washington, D.C. Area residents who applied for home-purchase mortgage loans during 2017, about 53 percent applied to buy within the same city or county they currently lived in, while 31 percent applied to buy elsewhere in the Washington, D.C. Area and 17 percent applied to buy outside the Area.[1] The Washington, D.C. Area includes the District of Columbia, five counties in Maryland, 17 counties/cities in Virginia and Jefferson County in West Virginia.

A combination of tight supply and high demand driven by an improving economy with strong job growth has led to affordability challenges in the Washington, D.C. Area. Home prices in this area, especially core areas such as Washington city, Arlington county and Alexandria city, have risen significantly and become less affordable. In fact, the median prices in Washington, Arlington and Alexandria in 2017 rose above their pre-crisis peaks by 23 percent, 19 percent and 4 percent, respectively.[2] However, the median prices for most of the other counties in the Area are still below their pre-crisis peaks.

In a search for affordability, some homebuyers are either moving to geographically adjacent counties with lower home prices or relocating to more distant and affordable locales. These buyers, seeking affordability and more space, have chosen to commute long distances or change jobs to reduce housing costs. Figure 1 shows the intercounty migration flows of potential homebuyers in the Washington, D.C. Area’s cities and counties as sources and destinations of moves in 2017. Based on the in and out migration of potential homebuyers during this period, Arlington ranked highest in terms of homebuyers applying out compared to homebuyers applying in with a ratio of 3.20, followed by Alexandria (1.98), Fairfax (1.70), D.C. (1.69) and Montgomery (1.61) (Figure 2). Conversely, more homebuyers were applying into the county than leaving in the remaining Washington, D.C. Area counties, which includes Prince William (0.66), Prince George (0.56), Loudoun (0.44), Stafford (0.41), Charles (0.29) and Frederick (0.23).

Consistent with CoreLogic findings in earlier blogs for other metro areas, potential homebuyers were attracted to more affordable adjacent counties. Core cities and counties along the Capital Beltway, such as Washington, Alexandria, Arlington, Fairfax and Montgomery experienced net outward migration. In contrast, more distant suburb counties in northern Virginia and Maryland experienced positive inflows. Figures 1 and 2 show that most higher-cost areas – Arlington, Washington, Alexandria, Fairfax and Montgomery – lost applicants to more affordable contiguous counties. For example, Arlington County lost potential homebuyers to more affordable adjoining counties and cities such as Alexandria, Fairfax and even Washington. Similarly, Fairfax County lost a significant share of potential homebuyers to Prince William and Loudoun counties.

The trend of migrating to more affordable areas to buy is evident in the overall Washington, D.C. Area. This area, which is one of the most expensive metros, experienced net outward migration of homebuyer applicants in 2017. The ratio of homebuyers applying out to homebuyers applying into the Washington, D.C. Area was 1.87, up from 1.78 in 2016, which means that nearly twice as many Washington, D.C. Area homebuyers wanted to buy outside the area than homebuyers living elsewhere wanted to buy in the Washington, D.C. Area.

[1] All first-lien home-purchase mortgage applications, accepted or not, during 2017 were included in the analysis. Investors and second-home buyers were excluded. Metros within Maryland and Virginia were the most popular destinations to buy outside the D.C. Area. About 3 percent of the potential homebuyers who currently live in the D.C. Area applied to buy a home in the Baltimore metro.

[2] Based on CoreLogic Real Estate Analytics Suite (REAS) Market Trends Data.

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