Why High Housing Costs Could Unify America

It’s hard to argue there are deep divisions between Red and Blue states in America, but one thing seems to be bringing the country together: sky-high real estate prices. Americans are fleeing expensive coastal cities, which tend to vote for Democrats, and migrating to cheaper, smaller places in the middle of the country, which tend to support Republicans.

While voters often tell pollsters they want to move to places with like-minded neighbors– a phenomenon called the Big Sort by writer Bill Bishop — home economics is starting to trump politics. A survey by national real estate brokerage firm Redfin.com found that 18% of millennials who bought a home last year said they moved to a community where they were in the political minority.

Only a few months earlier, 46% of millennials told Redfin that they would be hesitant to move to an area where “most of the residents did not share their political views.”

Redfin CEO Glenn Kelman thinks this trend could be the key to healing some of the political divisions roiling America’s politics.

“The way you depolarize the country isn’t with political rhetoric. It’s with a moving van,” said Kelman, who lives in Seattle. “I know people who’ve never met someone who voted for Trump. (They are) imaginary creatures. Anyone we imagine, we can imagine a monster. But when you meet a conservative, or you meet a liberal, you immediately moderate your views.”

How Moving May Affect The Way You Vote

Most of the time — by a ratio of nearly 8 to 1 — a Blue-stater moved into a Red state rather than the other way around during the past twelve months, Redfin said. The trend seems to have some staying power, too. Refin’s analysis of county-to-county migration data published by the U.S. Census says that from 2011 to 2015, over 50 percent more migrants moved from Blue to Red counties rather than the other way around.

The calculus for making such a move, despite the trepidation, is pretty self-evident. Nationwide, the average home in a Blue county costs around $384,000— 65 percent more than that of homes in Red counties, which averages $233,000, Redfin says.

And while salaries in pricey coastal places tend to be higher, they aren’t high enough to offset the increased price of housing. Blue-county residents spend on average 32% of their household income on rent, nearly 5 percentage points higher than residents of red counties, according to Redfin’s interpretation of Census data.

Redfin’s finding are consistent with other research. ATTOM Data Solutions, a housing market research firm, recently examined 446 counties for an internal migration report and found those with the largest net migration increases in 2017 were Maricopa County (Phoenix), Arizona., Clark County (Las Vegas), Nevada, Riverside County, California, Denton County, Texas (Dallas), and Hillsborough County, Florida, (Tampa-St. Petersburg).

Among the top 10 counties with the largest percent increase are three counties in Texas, four in Florida, and one each in Arizona, the Carolinas (Myrtle Beach), and Utah (St. George). San Antonio, Texas, led the pack.

“Coastal markets are the epicenter of the U.S. home affordability crisis,” said Daren Blomquist, senior vice president with ATTOM. “We do see strong evidence of migration from higher-priced blue states (and) counties to lower-priced red states (and) counties.”

There’s plenty of evidence that the moves are Blue to Red. Another Redfin study of places with high net inflows – like Nashville, Phoenix, Austin, and Dallas – shows these cities are gaining at the expense of places like New York, Seattle, and San Francisco. For example: 34% of Redfin searches for Phoenix homes come from outside the metro area, with the most from Los Angeles; and 32% of Nashville searchers are out-of-towners, with most from New York.

The political question, the one all the party bigwigs will be working on during the next election, is this: Will moving change the neighborhood, or will the neighborhood change the voters? Will an influx of Blue voters from Seattle turn Arizona Blue, or at least purple? Or will the new kids in town slowly assimilate and change their views, becoming more conservative?

Either way, the un-sorting of American political views could be the silver lining in the high housing costs story, Redfin executives think. It’s easy to hate people, or at least ignore their views, when they live hundreds of miles away and live very different lifestyles. It’s much harder to do so when they live next door.

“When I go to Texas or other parts of country known as conservative, there’s a real feeling that’s going to change. Nevada, Arizona, Texas, those are solid red states. Those states all (are experiencing) massive amounts of migration,” he said. “San Francisco thought it had a monopoly on enlightenment and diversity, but that attitude is beginning to seem quaint.”

When Did This Trend Start

Kelman believes the change started five years ago when the housing market recovered. But it accelerated more recently, as some psychological-financial barriers were broken; for example, when software engineers started making $100,000 out of college, and when the average San Francisco home surpassed $1 million.

Companies that were reluctant to have geographically disbursed workforces are embracing it now, out of necessity. And workers are suddenly jumping at the chance to take transfers to low-housing cost cities.

“You have employees coming in saying. ‘I need a raise, I can’t afford a house. These are people making $150,00 a year,” Kelman said. “Every CEO I know looking at opening an office somewhere else.”

How this trend might remake political maps around the country remains to be seen. Urban gentrification certainly hasn’t been a direct route to racial harmony; in fact, author and scholar Derek Hyra argues it can instead lead to “micro-level segregation.” That might happen politically, too: There might be Red towns and Blue towns, or even Red blocks and Blue blocks.

Still, Redfin believes proximity alone will at least help people gain understanding and tolerance for each other. They’ll have to. For those looking to the future, the Blue-to-Red trend seems inevitable, Kelman said.

“I am an enthusiastic urbanist…but (places like San Francisco) are increasingly a ‘no-fly zone for people with families,” he said. “With anyone who is director-level and below, the conversation is, ‘We can’t afford to live here.’ “

If you’re wondering if your credit is good enough to move into a new home, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated every 14 days.

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