This is not good news:
Movement into and out of U.S. cities slowed sharply last year as the housing bust forced more Americans to stay put, according to new Census Bureau data.. . .
Demographers attribute the migration slowdown to the slumping housing market, which is making it harder for sellers to unload houses and is encouraging buyers to wait for prices to fall further. Many Midwestern and Northeastern cities continue to attract new young residents, many of them renters, who move there for jobs. But because the housing market is so weak, some young urban couples who would normally be headed to the suburbs to start families are staying put, as are retirees hoping to move to the South.
High levels of labor mobility are one of the great strengths of the American economy. If our housing market is tying workers to slumping areas, it will take longer--and more pain--for the country to pull out of the current slowdown.
The next couple of years are going to be rough. I was planning on buying this year, but now I'm going to continue to rent (in the same house). FWIW I'm in the Philly/NJ suburbs, house prices are slowly heading down, but the market activity has plummeted.
I don't get the causality. Housing prices are dropping so that means renters aren't moving anywhere? That doesn't make sense. Part of the benefit of renting is that your choice of residence is more fluid. You are not tied to your residence and can move the moment you want to (or when your lease is up, depending on your contract). There is relatively little cost in a renter moving.
Avner,
I wonder about the actual magnitude of the effect, but the causality with regards to renters is that they are waiting to actually purchase a home at the event of their move.
So rent in the new neighborhood to which you would move. It may not be the same type of place you would buy, but what do you care if it is temporary.
On the other hand if you have an opportunity in a new location and know you want to buy there, then buy right away. It doesn't make a lot of sense to view a home as an investment so no need to buy in at the bottom of the market. It is first and foremost shelter. Besides, I bet wherever one moves to today they will find much to buy.
Now if the argument was that home-OWNERSHIP was holding back mobility I could understand the argument. But that didn't seem to be the argument here.
I seem to remember that the NY Times ran this exact story about 2 months ago, and that most of the commenters on this blog laughed and denied it was happening.
Why doesn't anyone talk about the great discount first time homeowners are receiving in this slump? There is a neighborhood I've always wanted to live in, but couldn't touch at the $325-$350,000 range. Now I'm starting to see properties in that area in the $280 range. Still a bit rich for my blood, but if it slides to $260 I'll go for it. I could get my dream home in a dream neighborhood at a 20-30% discount. Sweet.
Megan, I don't know why you're drawing the conclusions you are from this article. The linked article says expressly that job-related moves are still bringing people to cities where employment is hot. By contrast, moves from the city to the suburbs or to retire to the Sunbelt are not reflective of labor mobility.