- Texas saw the strongest migration growth in 2021, according to U-Haul’s latest growth index.
- People flocked to the state during the pandemic for its lower cost of living and sunshine.
- The pandemic has put a premium on the Sunbelt, but an urban theorist says it might not last.
No state is hotter than Texas right now.
The Lone Star State saw the strongest migration growth in 2021, according to U-Haul’s latest growth index. U-Haul calculated the net gain of one-way trucks entering a state versus leaving that state in a calendar year for more than 2 million customer transactions.
It revealed that one-way U-Haul truck arrivals in the state increased 19%, compared to an 18% increase in departures from 2020 to 2021. While Texas saw growth statewide , according to the index, Dallas led the way. And many of the new migrants came from the east and west coasts, namely New York and California.
Although U-Haul notes that these migration trends do not directly indicate total population or economic growth, it measures the attractiveness of cities to new residents. The Texas taking center stage fits the story of a mass exodus to the state and the resulting housing boom.
The state has been a magnet to Americans seeking more space, less taxes and warmer weather during the pandemic, with a particularly strong pull from Silicon Valley. As fleeing Bay Area residents scattered all over Miami to Denver, most flocked to Texas, including Dropbox CEO Drew Houston and Tesla and SpaceX CEO Elon Musk. This influx of technology has created new jobs in the state, while remote working has resulted in the relocation of workers in search of a lower cost of living. But the boom has created an affordability crisis as everyone struggles for a place to live.
Texas real estate boom turns into crisis
A Texas A&M University housing study finds that Texas home prices climbed 18.6% year-over-year in 2021, and Redfin found that in October 2021, 68.4% of its Dallas bids faced a bidding war, down from just 53.3% in 2020.
Income does not keep up with soaring house prices. Although Texas personal income grew 4% per year in the third quarter of 2021, this is a significant drop from the 21.7% rate in the second quarter, according to the US Bureau of Economic Analysis. United.
As housing affordability weakens, many potential buyers look for other options. In Del Valle, Texas, where Tesla’s gigafactory is underway, data from Zillow shows average home values have risen 58% since January 2020. As home prices skyrocket, Bloomberg reported, lower-cost housing alternatives like trailer parks and cottages are gaining popularity among the mid-skilled factory workers who earn only $ 50,000.
“How is a $ 47,000 a year person who has kids, and all the costs associated with that, going to buy a $ 500,000 house?” Scott Roberts, managing director of mobile home developer Roberts Communities, told Bloomberg. “They can not.”
The rise of the solar belt
Patterns of migration to Texas are evident from the popularity of the Sun Belt during the pandemic. Florida, Tennessee, South Carolina and Arizona all made the top five on U-Haul’s Growth Index.
The Sun Belt region is expected to dominate the market through 2022, according to a Zillow study, with cities like Tampa, Jacksonville, Raleigh, San Antonio and Charlotte expected to dominate the United States in terms of popularity.
“The pandemic has put a premium on the Sunbelt,” city planner Richard Florida told Insider. But he believes his popularity is being overstated, anticipating that more people will return to the superstar cities they left from as we enter a post-pandemic world. He added that house prices have to reverse at some point, and when they do, it will be Sunbelt’s booming cities – like those in Texas – that will take a hit.
“The action takes place in New York, Los Angeles and San Francisco,” he said.