That brings the conversation to the curious case of Santa Barbara County, which ranked as the top buyer's market in this study. The statistics make it sound like a great opportunity to snap up a coastal resort home under optimal conditions.
Unfortunately for buyers, even in a normal year, a high position on this list doesn't mean that these areas are rife with bargains. Instead, buyer's market conditions represent a downshift from the prior year -- which might have been smoking hot -- as well as the pace at which property is moving at current prices. Sometimes, these conditions lead to price reductions, but not always -- particularly if buyers storm back into the market and absorb the existing inventory.
Such was the case here in this unprecedented year, where roughly 10 real-estate agents laughed at the idea that buyers are controlling the current market in Santa Barbara County.
"It is anything but a buyer's market. There is no inventory," said Wendy Gragg, the broker and owner of Distinctive Real Estate in Montecito.
Realtor.com's economic research analyst Nicolas Bedo credited the March freeze and subsequent surge for the disconnect between the data and the experience on the ground. "It's possible that downtown neighborhoods closer to the coast have experienced a more rapid recovery," he said. "The situation in changing quickly." Several agents who specialize in homes within Santa Barbara proper and Montecito said that after a dead March and slow April, droves of buyers began flooding in from Los Angeles, San Diego, New York and elsewhere.
Agents in Solvang and Santa Ynez, two inland, agricultural areas of Santa Barbara County, understood why their market was characterized as favoring buyers in the early part of year, but also said that it is no longer true. Allan Jones, president of Santa Ynez Valley Real Estate Company, said while ranches typically take a long time to sell, "one started moving, then another, and now inventory is the lowest I've seen in 32 years."
Among buyers was Jon Lukas, who closed on a 5-acre property in Solvang at the end of August. Mr. Lukas, a 47-year old investor, has lived in Santa Barbara County for years but dreamed of a larger property where his daughter Savannah, 11, could ride her horse. On a walk, he came across his new home, listed for $2.54 million.
The asking price might have been high for the area before Covid, said Patty Murphy, Mr. Lukas's agent at Sotheby's International Realty-Patty Murphy Country Estates. But in the pandemic-influenced market, demand for properties on larger parcels skyrocketed, she said. Mr. Lukas offered $2.37 million and leased the property back to the sellers for a month, charging them only $2,500 and running the risk that they would overstay. Everything worked out, however, and Mr. Lukas and his daughter moved in mid-October. Also making the move: Marble, Savannah's quarter horse, and Albert, Mr. Lukas's horse; Beatrice, Coco and Bon Bon, the family's goats; 20 chickens, a cat, a dog, a bunny and a piglet named Hamlet.
Migration Destinations
What is a migration destination?
-- The metro areas with the most page views for homes valued at $1 million and up by people who don't live in those metro areas, ranked by percentage increase since last year, according to an analysis by Zillow.
Drew Erra, a 52-year-old insurance broker and moving-company co-owner, and wife Melissa Erra, lived in Minneapolis for 24 years. But in July -- when many Americans were realizing that working from home, remote learning and social distancing would be the new reality for a long time -- they picked up and moved to Las Vegas. Their new home, a $3.2 million, arts-and-crafts home with a pool and golf-course views, cost over $2 million more than the one they sold in Minneapolis.
"I was paying 10.5% state income tax in Minnesota," a rate which has now dropped to zero in tax-free Nevada, Mr. Erra said. "Just the tax savings alone covered the cost of the house."
In their migration to Las Vegas, the Erras had company. Searches by out-of-towners for homes over $1 million in the Las Vegas metro area surged by 155% from last year, according to Zillow's analysis. Ten agents and brokers in the area said they have never seen more relocation interest.
"More are driven to come here by high taxes in their states," said Heidi Kasama, the listing agent at Berkshire Hathaway Home Services Nevada Properties for the home the Erras purchased. Weather is also a draw. "We have a few hot months, but we don't have hurricanes or floods," she said.
High on Zillow's list are several traditional vacation-home destinations, where local agents say demand is up as more people look for an escape from the city where they live full time and as more people are relocating now that they can work from home. Hilton Head, S.C., Jackson, Wyo., and the towns on Cape Cod, Mass., all saw big search growth. The number two spot on the list is held by Kalispell, Mont., the metro area of the Whitefish ski resort area, Glacier National Park and Flathead Lake. Local agents say that after March, they got a surge in calls about both vacation and permanent homes.
"We've been seeing this growth for the last five years, but it's on steroids now," said Stephanie Sunshine, a broker with National Parks Realty in Whitefish.
One of Ms. Sunshine's buyers was Doug Allen, who closed on a $1.2 million log-cabin-style home in Kalispell in March. Mr. Allen, a 45-year-old scrap-metal business owner and his wife, Janel Allen, 49, live in Longview, Texas. Mr. Allen became familiar with the Kalispell area while working as a pilot for a cargo airline in his late 20s and vowed to one day make the region part of his life.
The home now serves as a part-time escape for the Allens and their three children, who spent much of the summer there, mountain biking, zip lining, alpine sliding, and fishing for trout and salmon.
Austin, Houston and Dallas all showed out-of-town search increases since last year, which is no surprise to Marie Bailey, an agent with Fathom Realty in McKinney, Texas. After her own relocation from El Segundo, Calif., to Prosper, Texas, in 2017, she became a real-estate agent and the following year started a Facebook group called "Move to Texas from California!" The group now has over 21,000 members and has generated roughly 70 leads to whom Ms. Bailey has sold homes. Interest has surged since March, Ms. Bailey said, noting that many posts on the page express outrage over restrictions on business and education imposed by state and local government in California, Ms. Bailey said.
"Most of my members are looking for a lower cost of living," Ms. Bailey said. "They also feel there will be more political acceptance in Texas."
A search for cheaper luxury homes is driving interest in Salt Lake City, the third entry on Zillow's list.
Adam Kirkham, with Summit Sotheby's International Realty in Salt Lake, said that as of October 1, there was 45% less inventory above $1 million compared with a year ago.
"Anecdotally, buyers are coming from Los Angeles and the Bay Area, which is by far the highest feeder market from California," Mr. Kirkham said. "From the East Coast, it's from Virginia, the D.C. area, New York and Boston." Most transplants have some connection to Utah through family or having gone to school there, he said.
This year, Mr. Kirkham participated in deals for five buyers relocating from out-of-state who paid between $2 million and $3.5 million in the suburb of Holladay, he said. In August, a buyer moving from Seattle paid $2.3 million for an 11,653-square-foot home Mr. Kirkham listed.
"A lot of buyers have equity from more expensive markets, like in California, and they are bringing it with them to the Mountain West," he said.
Write to Katy.McLaughlin at Katy.McLaughlin@wsj.com
Corrections and Amplifications
This article was corrected on Nov. 2, 2020 because it misstated that Kalispell, Mont., is near Bigfork Lake. It is near Flathead Lake.
(END) Dow Jones Newswires
10-29-20 1240ET
