The real estate market has split in two. Sunny winners of the work-from-home reshuffle, like Tampa, Phoenix, and Atlanta, are no longer on top.
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Just a few years ago, housing markets in the warm, sunny parts of the US looked, well … warm and sunny. In the halcyon days of 2021 and 2022, cities like Austin, Tampa, Phoenix, and Atlanta
attracted swarms of movers. Home listings reliably drew multiple
offers above the asking price, and buyers plunked down
all-cash offers to fast-track their purchases.
Flash forward to today, and the big "winners" of the work-from-home reshuffle — metros that drew hordes of footloose workers and disaffected coastal dwellers — have turned into losers. Fewer people are moving to
so-called Zoomtowns. Home listings are piling up on the market. Prices are dropping. The anxiety has shifted from buyers trying to elbow their way in to sellers just trying to offload their properties. A new report by the real estate analytics firm
Parcl Labs, shared exclusively with Business Insider, shows that home sellers in the lower half of the US, also
known as the Sun Belt, are the most desperate in the country.
Housing markets
in the Midwest and Northeast, on the other hand, are going strong. Inventory in those parts of the country remains tight, and prices are up. Homes are selling at a brisker pace than in the rest of the US. These cities
didn't garner much attention during the pandemic (how many glowing headlines did you see about Buffalo, Cleveland, Milwaukee, or Detroit?), but sellers there have quietly held onto their bargaining power. By practically any measure, the country's real estate leaderboard has flipped.
"We are in a two-tiered housing market," Mike Simonsen, the chief economist at the brokerage firm Compass and the cofounder of Altos Research, tells me. "It's really stark."
At first glance, this might seem like a simple tale of supply: Builders
flocked to the Sun Belt and put lots of shovels in the ground, setting the stage for an inevitable drop in prices when all those new houses hit the market. Sure, that's part of it. But this is also a story about even bigger
shifts in the labor market, migration trends, and affordability — why people are (or aren't) moving, and where they're choosing to put down stakes. The Sun Belt isn't drawing movers like it used to, while the Midwest and Northeast are holding onto more people than they did during those peak pandemic years. Even more troubling, many Americans aren't moving at all. They're
stuck in place, scared to quit their jobs or trade their cheap mortgage rates for more expensive ones. With no signs of a reversal on the horizon, the new housing-market winners could stay on top for years to come.