California transplants – many of them with relatively deep pockets – have played an outsized role in the blazing spike in Denver-area home prices, data from Redfin shows.
Redfin, a national real estate brokerage firm, released data last week that shows a national pattern of highly paid workers from major job hubs bringing large salaries with them to more affordable areas through the late 2010s and early 2020s.
Over the past five years, people moving into Colorado have had significantly higher budgets than the people already living in the state. The trend is especially clear in Denver in 2020 and the years afterward, the data shows.
The year before the COVID-19 pandemic began, transplants looking for homes in the Denver area had a housing budget 3.8% higher than Colorado residents.
That changed in 2020 when COVID restrictions triggered a race for space. That year, transplants’ housing budgets were 16.5% higher than people already in Colorado, the equivalent of $100,000 for the current median-priced home.
Since then, transplants have continued to hold higher home budgets. In 2021, they had 15% more to spend on housing and 11.8% more through June 2022.
Redfin’s migration data shows transplants came from everywhere, but the biggest chunk of incoming people was from California.
Almost 24% of Colorado move-likely housing searches were from California in the third quarter of 2020, according to Redfin migration data — several times more than any other state. Three-quarters came from California, Illinois, Texas, Massachusetts, Washington, D.C., Washington and New York combined.
For each quarter going back to 2017, California was the largest out-of-state source of housing searches for Colorado. This aligns with IRS data that pinpoint California as the single-largest source of relocations to Colorado from 2010 to 2018.
Redfin’s deputy chief economist Taylor Marr said this has been the trend in the Mountain West for years. Tech workers priced out of Silicon Valley, he said, have been steadily migrating to Phoenix, Salt Lake City, Boise and Denver, among other Western locales that have also seen massive spikes in housing costs in the past five years.
Similar trends are taking place on the East Coast, with New York City remote workers relocating to Florida, Nashville or Philadelphia.