Thanks to COVID-19 Americans are on the move—again.
In less than twelve months, panic selling, irrational buying, jittery markets, remote work, and the desire to get more space for less money in the middle of the ongoing pandemic have created one of the most frenzied and unpredictable real estate markets in a generation.
On a local level, single-family suburbs are back. Tight, overpriced apartments in Manhattan and San Francisco are out. In itself, this will take years to unravel as urban real estate re-prices, businesses re-open (or don’t), and companies decide when, and if, to bring employees back to work.
Americans are also hitting the road across state lines faster, farther, and more permanently than ever before.
This is according to the most recent data released by moving companies U-Haul and Atlas Van Lines based on one-way moves during 2020 as well as real estate website Redfin which tracks housing markets. Lured by warmer, healthier, stabler, and more affordable places where they can work remotely, residents from high-tax, heavy-lock down states like New York, Massachusetts, New Jersey, Illinois, and California are fleeing to Florida, North Carolina, Georgia, Texas, Arizona, and Nevada in near record numbers.
This COVID-catalyzed migration wave will have outsized consequences for housing prices, infrastructure, and jobs nationally as well as locally. It’s longer-term shock, however, may be felt at the ballot box.
Back in late July 2020, Newsweek published a feature story asking whether the “blue invasion” of “red state America” would finally pay off in the 2020 Presidential election.
Demographically at the time, it was largely a rhetorical question. The slow-motion, mass migration of Americans from north to south has been changing the make-up of the U.S. for a generation. The authors’ more central argument was whether 2020 would be the year that America’s real estate diaspora from high taxes to palm trees would finally ignite an electoral supernova.
Their premise went essentially like this: once upon a time in recent memory states like Virginia, New Hampshire, New Mexico, and Colorado still leaned predictably red, which gave the GOP several paths to the White House and a Senate majority (ergo the Reagan and Bush years). Now, barely two Presidents later, those states are all reliably blue. At the same time, previously red Arizona, Nevada, and North Carolina are rapidly shading purple. Georgia, if recent election results are any indication, has flipped already.
No one believes that this happened internally because in-state voters all of a sudden switched parties. Political pros on both sides of the aisle have been watching America’s “inevitable demography” for years, knowing that the convergent storm of immigration, generational replacement, and national migration trends from blue to red states could alter the national electoral map irreversibly for a generation.
Thanks to COVID kicking the housing market into high gear, however, that political tipping point looks like it’s here far sooner than anyone expected.
“In politics like real estate demography is destiny,” says Ryan Weichelt, PhD Associate Professor at the University of Wisconsin-Eau Claire and a noted expert on political geography, redistricting, and the Electoral College. “That means that whenever there’s any large-scale migration in America for any reason it has far reaching impacts no matter how quickly it happens, like Hurricane Katrina or the Great Recession. COVID’s doing the same thing now in the way it’s moving people around, and the repercussions on the political maps could be felt just as quickly.”
They could also last for a generation, adds Weichelt, which is precisely why the few pundits, PACs, and strategists who have been paying attention are quickly realizing that the most unexpected part of the pandemic’s new real estate normal might be political.
By the numbers here’s what we know: Millions of Americans relocated in 2020 because of COVID-19. This includes students moving out of university dorms that closed, workers moving back home or to “Zoom towns” to clock in remotely, Baby Boomers accelerating a downsize, and younger families and Millennials trading up to larger houses in lower cost of living locations that provided a more COVID-friendly lifestyle.
Drawing from an average annual sample of more than 2 million one-way moves, U-Haul truck rentals were up an average of 18% year-over-year between March and August 2020, peaking at 72% in May, reflecting the panic flight that drove many renters and buyers to uproot themselves during the first coronavirus surge as cities across the country shut down. Data from real estate website Redfin show a similar pandemically-driven housing froth, with a 25% year-over-year increase in single-family sales transactions and a near doubling in mortgage applications.
More politically relevant than all the raw activity, however, is where the bodies went. Overlay U-Haul, Atlas, and Redfin’s data with a map of the 2020 Presidential election results and the long-term implications of COVID’s great real estate migration 2.0 get far more interesting.
Of the 10 U.S. states with the highest percentage of inbound moves in 2020 according to U-Haul six are blood purple battleground states with average margin of error in the recent Presidential election of less than 189,000 votes (or .4%): Texas, Florida, Arizona, Nevada, North Carolina, and Georgia. Subtract Texas and Florida and that voter margin of error drops to less than 33,000.
U.S. Census data collected through July 1, 2020 show a similar shade from red to blue, though only capturing the first third of the pandemically-catalyzed real estate migration. Four of America’s ten fastest growing states according to the Census Bureau’s results in 2020 are Arizona, Nevada, Texas, and Florida. In North Carolina and Georgia, the in-migration numbers aren’t that far behind.
Taken by itself, none of this housing growth seems particularly surprising or nation-changing politically at first—until you start to look at where all those people moved from.
Per U-Haul, four of the top ten destinations for residents leaving California in 2020 were Nevada (#1), Arizona (#2), Texas (#5), and Florida (#10). For New Yorkers leaving the Northeast entirely North Carolina was the #1 destination, followed by Florida (#2), and Texas (#4). Florida, Texas, and North Carolina all also ranked in the top ten landing spots for residents moving out of Illinois and New Jersey last year.
Toss all this together and it doesn’t take a PhD to see the outsized political impacts COVID’s real estate migration quickly could have on flipping election results up and down the ballot for decades to come.
“The pandemic accelerated a national housing migration that’s been gradually occurring for a decade,” says University of Wisconsin’s Weichelt. “The cost of living in places like LA and Silicon Valley was already pushing people into neighboring states like Utah, Nevada, Colorado, and Arizona which have all seen tremendous growth particularly from younger, highly-educated workers in the tech sector. Colorado flipping from red to blue over the past two decades was largely due to this migration trend. And now that COVID has made the move to remote work even more possible, we’re going to start to see this trend accelerate in other swing states where cities like Salt Lake City, Phoenix, Dallas, Denver, Austin, Nashville, Atlanta, Charlotte, Jacksonville, and Miami are going to continue to become larger virtual innovation hubs for different industries.”
From an economic standpoint, that’s great news for the cities and states absorbing these new residents, which will benefit from the jobs and businesses knowledge workers import with them, like restaurants, co-working spaces, music venues, event companies, BMW car dealerships, and boutique hotels where out of town friends and family can stay overnight.
At the same time, however, it’s generally assumed that where people move they take their political opinions and voting preferences with them, which in the case of the millions of Americans who moved during the pandemic is already starting to have very real and potentially tectonic impacts.
“Politically there are already a number of things we’re watching for that (COVID’s real estate migration) could impact immediately because it coincided with the 2020 Census, which means that where people moved to during the pandemic is going to be captured in the results,” continues Weichelt. “These are changes to the Electoral College, changes in Congressional Seats, and changes in overall political geographies. The first two are directly connected to population growth compared to the rest of the country. Electorally, faster growth means greater chances to gain seats in Congress. In part thanks to the pandemic, places like Texas, Arizona, Nevada, and Utah are expected to gain additional Congressional seats and in turn stronger Electoral College clout. On the other hand, California is slated to lose one Congressional seat for the first time ever. In a narrowly divided legislature like we have now in the Senate, those one or two votes can make all the difference.”
Relative to the national scale at which COVID scrambled the interstate housing market, the American political reality that every vote counts also could have outsized consequences at the local level, which is what Weichelt means by political geographies.
For example, millions of residents fled America’s cities during the pandemic for the suburbs and ex-urbs seeking less density, greater affordability, and more space to self-isolate. That mass migration into generally more rural and in many cases more conservative electoral districts could affect local politics faster than anything at the federal level, including upcoming elections for mayor, county commissioner, judges, the school board as well as state Senators and Representatives.
“Historically most migration has occurred in and between larger urban areas,” Weichelt tells me. “But this time with COVID what’s happening within states is entirely new. Even though millions more people now can work remotely, many it appears want to stay near family or like the region where they live already so they’re moving between counties and electoral districts instead of to another state entirely. That has the potential to swing local election results in places like Arizona, North Carolina, and Georgia up and down the ballot where the voting margins were already razor thin.”
In some respects, even more unprecedented than the impacts COVID’s real estate migration could have on politics is how little most actual politicians seem to be paying attention.
Weichelt believes part of this is because there still are more obvious important things for legislators to be concerned about—like the ongoing pandemic, persistently high employment, and small business extinction. The other reason is illegal immigration, which as a matter of television ratings as well as potential electoral influence tends to dominate the national news cycle far more than the “non story” of Americans moving inside of their own country.
There are also many things that we still don’t know. Tracking COVID-19’s short-term reverberations on longer-term national migration trends is a squirrely statistical endeavor, along with predicting how permanent the current shifts in America’s housing market will be. Most importantly, while new residents to any state generally pack their voting habits with them, it’s impossible to be certain how anyone will vote in any coming election which makes political predictions based on real estate maps sometimes a long leap to make.
“It’s always difficult to predict political behavior any time past the current moment,” says Jonathan Cervas, Post-Doctoral Fellow at Carnegie Mellon University’s Institute for Politics and Strategy. “Which means that just because someone’s moving from New York to Florida or California to Nevada it doesn’t necessarily mean that’s tipping the electoral scales blue. If they’re moving from high tax, high cost of living states and cities like Manhattan and San Francisco to low or no tax, lower regulation states because that’s beneficial or attractive to them in the first place, it’s just as likely that they’re moving for political reasons as well. A million people could move from California to Las Vegas tomorrow. But if half of them vote Republican and half of them vote Democratic does it really make any net political difference at all?”
According to Redfin’s Lead Economist Taylor Marr, who’s tracked American housing data down to the county level and correlated it with voter registration rolls for years, that answer due to the pandemic is a fairly definitive “yes”.
“Swing counties in swing states were the most popular destinations for Redfin.com users looking to move across county and state lines during the first half of 2020 which means that’s where the impacts of COVID on housing and politics likely will be most immediately felt,” says Marr of the potential for the pandemic migration to impact upcoming election outcomes. “Even in non-coastal states that tend to be less expensive, affordable swing counties that have a healthy mix of single-family homes, condos and townhouses are more attractive than ever how in the midst of the pandemic. By contrast, the bluest, most expensive counties are failing to attract a lot of the families who are looking to relocate right now.”
By Redfin’s estimates 6.5% of Americans were interested in moving from blue to red counties in 2020 in the middle of the pandemic, presumably in some part due to COVID fatigue and the desire for fewer restrictions and more open economies. In swing states like Texas, Arizona, and North Carolina that number jumped to 9.3%.
On face value those might not seem like big numbers, says Marr. But in counties and towns where the electoral maps were already at a tipping point, it’s more than enough to solidify permanent majorities for decades starting right now.
“Georgia is a perfect case in point,” says Marr. “People moving to Atlanta from pricey, liberal metros like New York, Washington, D.C. and Los Angeles which accelerated during the pandemic are likely one major factor that helped tilt Georgia blue in the 2020 presidential election for the first time in 28 years. The 50,000 people who moved into Georgia last year—over 37% of which came from New York City—could have also tipped the balance of the Senate run-off elections in January.”
While no one I spoke with can say with any certainty the extent to which COVID’s real estate migration ultimately will influence the next rounds of elections, the general consensus is that the ball is in the Democrats court.
Consider, for example, the implications of this one possible scenario. According to Nathan L. Gonzalez, a non-partisan election analyst, only eight of 34 Senate races are in play in 2022s Florida, North Carolina, Pennsylvania, and Wisconsin, which are held by Republicans, and Arizona, Georgia, New Hampshire, and Nevada currently held by Democrats.
Let’s assume that Democrats hold all four of their seats since the states where they are up for grabs have seen net in-migration from predominantly blue states like California and New York since the pandemic began. For the same reason let’s assume that the opposite happens in Florida or North Carolina, and Democrats flip Senator Marco Rubio’s (R-FL) or Richard Burr’s (R-NC) seat, tapping into a wave of politically active new residents casting their ballots for the first time in their recently adopted state.
Assuming that happens, the Senate balance of power shifts from 50-50 to 51-49, giving now President Biden two years of total control to implement his legislative agenda.
“It just happened in Georgia,” says Marr. “And it’s not out of the question that the same thing could happen in Florida or North Carolina 20 months from now. And that changes everything politically all over again.”
The other wild card in all of this is how much political money and influence moves with the real estate data. It’s one thing for a person to decide to move from one state or district to another during a global pandemic and take their vote with them. It’s an entirely different matter if that person is already an active political donor with $10M in their electoral war chest.
“Billionaires have been influencing political campaigns nationally for years and sending money across state lines to races that could tip the balance of power,” says Cervas, pointing to the $1B that was recently spent on the Georgia Senate run-offs. “That said, since most of the people who had the flexibility during the pandemic to move are presumably wealthy, the local political scene has the potential to change suddenly if politically active donors arrive from out of state. If they bring their businesses with them, they’ll also be more likely to lobby the state government to change the tax structure, for instance, or to contribute to county commission and mayoral races to change things that benefit them. This ‘monied’ side of COVID’s migration will take years before its impacts on local and state politics are sorted out. But they could be significant.”
From a purely real estate perspective, Redfin’s Marr agrees. But he’s also quick to add that in the case of swing state metropolises like Miami, Austin, Nashville, and Raleigh—whose political density has the forcefulness to entrench prevailing electoral interests for decades on both a state and national level—those “monied” effects are likely to be even more pronounced.
“The whole influence part of this (COVID housing migration) story is still one of the real unknowns,” Marr says. “In the past, I’ve dug down into country level voter registration rolls to try to correlate where people are moving with how politics are likely to lean as a result. But this is something that we’ve never looked at before. My feeling is that this is very real, particularly as it’s related to the tech and finance sectors and how deconstructed they’re becoming. This will have major impacts on the west coast specifically and in Nevada, Arizona, and Texas where a lot of executives and companies are relocating. Mayor Suarez in Miami is also doing a great job luring innovation and tech companies away from California to Florida. But there’s a consequence to all of this politically. Money buys connections, connections lead to power, and power changes elections.”
As for what happens next, everyone I spoke with agreed that it’s all up to the political class now. COVID’s great real estate migration in many ways has already swept through, though the housing and migration trends it unleashed will likely persist for years. It’s the “inevitable demography” of the fallout that no one quite knows the answers to yet.
For politicians of both parties, as well as the apparatuses that exist to keep them in power such as the Democratic Congressional Campaign Committee (DCCC) and the National Republican Congressional Committee (NRCC), vexing questions remain well into 2021 and beyond. For Democrats they fall mostly along the line of how to take advantage of the moment. For the GOP, there’s a longer term reckoning to face about how the party got here in the first place and how to crawl back out.
Yet, like almost everything political, the future is only as “real” and “factual” as how biased one is about the data. Some people I spoke with for this story believe without question that COVID’s real estate migration will solidify Democratic political power in Washington for a generation. Others have already put their money behind the fact that Republicans have the better long-game chess board at the local level, where the levers of power in a federalist democracy still can sway national issues, such as abortion, immigration, climate, and—not surprisingly—how we vote and count ballots in the first place.
Finally, there are the “X” factors.
The pandemic’s repercussions on American politics as a result of its ensuring housing diaspora is one of many factors that will continue to scramble U.S. electoral maps for years. How those impacts ultimately overlay with, counteract, and accelerate larger, more long-term trends like an aging population of Baby Boomers and illegal immigration is what will matter most when it comes to catalyzing anything approaching generational political change. People like University of Wisconsin’s Weichelt, however, don’t think that convergence is an impossible stretch.
“By 2030, 61 million Americans will be 66 to 84 years of age which is 20% of the population,” says Weichelt. “COVID highlighted the vulnerability of this population and for the first time in decades Americans’ life expectancy is decreasing. Generally speaking older voters are highly motivated and lean heavily towards Republicans. So if these voters keep decreasing and ultimately pass away in states like Florida, Arizona, Georgia, and Nevada and more remote workers who vote more heavily Democratic take their place, what do you think politically happens then?”
Thanks to COVID, we’ll likely know that answer far sooner than anyone expected.