An aerial view of downtown Raleigh from the warehouse district.
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Historically, Americans have moved in order to find better economic opportunities. But the driver has now shifted from the “Go West, Young Man” mentality, where the free and open land offered that opportunity, to much more personal incentives such as family and affordability, according to an annual migration report from United Van Lines.
The study found that Americans are not only choosing to live closer to family, but they also want smaller markets rather than urban centers as they seek cheaper housing and a better quality of life. This change will have a significant impact on commercial real estate investors and the choices they make in the future.
Oregon was the most popular moving destination for the first time in 2025, while Florida and Texas, which had seen huge influxes during Covid and early post-Covid years, are now seeing more balanced migration.
Six of the top ten receiving states were in the South and South Atlantic: West Virginia, South Carolina, North Carolina, Arkansas, Alabama, and Delaware.
“Data reveals that Americans are looking for a different pace of life, and destinations like Oregon, the Carolinas and the South are delivering,” Eily Cummings, vice president of corporate communications at United Van Lines, said in a statement. “While the total number of residential moves is similar to 2024, we are seeing much greater complexity in why people are moving and increasingly divergent migration patterns across age groups.”
Young millennials and Generation Z prefer New Jersey because it is more affordable than New York City. But retirees are leaving the state, making it the leading state for outbound migration, according to the report.
As the logic of migration shifts toward affordability and an easier lifestyle, the commercial real estate needed to support that is likely somewhat different than the primary driver of these migration patterns was stronger economic opportunity, according to Ryan Severino, chief economist at BGO, a global real estate investment, lending and services firm.
He said the need for more affordable housing, more modest office parks and more commercial space for middle and low incomes are better choices for investors. Even industrial real estate that supports this comes into play. For example, if people live in smaller work accommodations, they should have self-storage nearby.
Demographic changes also play a role in this thesis. Population growth slows, the rate of household formation slows, and the rate of migration slows over time, according to the U.S. Census Bureau.
“I think what that suggests to me, especially working for a private equity investor, is that we need to be smarter and choose our locations more carefully from a commercial real estate perspective going forward, than I think most of the last few decades, even though people have been operating under this general assumption that, oh, you know, these migration patterns are sustainable and accelerating over time, when the opposite is probably true,” Severino said.
Southern swing
As Americans continue to head to southern regions in search of lifestyle and affordability, migration patterns now appear more volatile and less sustainable than in the past and may not necessarily accelerate.
There was a huge migration to Southern states during the early years of the pandemic, and multifamily developers expected this to be a gold mine for many years.
“They would buy things thinking we’re going to get 6% and 8% rent growth as far as the eye can see, and we’re going to mint money and, in five years, we’re going to double what we paid for this thing,” said Manus Clancy, head of data strategy at Lightbox, a commercial real estate data and analytics platform.
Rents, however, are falling, as oversupply spreads through the system, and some of those who fled to the South are now leaving.
“The truth is that people were coming to save money, that while the migration was real, it was not without other factors, like new developments, new inventory going on. The new inventory in 2024 was the highest in 50 years. And I think there was a tremendous amount of buyer’s remorse,” he said.
Arizona, Nevada, and Florida are prime examples of where businesses have relocated and people have moved for a so-called “better quality of life,” but are now leaving.
“It has nothing to do with what I know to be real life. And I think a lot of investors and developers saw this as a longer-term structural change, an acceleration of these long-term models,” Severino said. “And so they went out and built a bunch of housing in Florida and Nevada and Arizona and places like that, and a lot of those people didn’t stay.”
Although snowbirds will continue to migrate South, commercial real estate investors need to be more strategic about where they put their money, according to Clancy, particularly in the retail sector.
“Guys like Simon [Simon Property Group] will do the high end, and they are… but they are very, very selective. Nobody’s going to say, “We’re going to build a mall to spec because we expect a million people from Illinois, Michigan, and Indiana to come here in the next five years.” “It just doesn’t happen,” he said.
Clancy said he expects to see more retail sales geared toward discount grocery stores and stores such as Walmart.
Mobile data shows that while there is a new push by younger Americans toward smaller, more affordable markets in the Midwest, older generations will generally choose to retire in the South, but not as much as in the past.
“Even though the population is growing, the rates of all these things are slowing, which means it’s probably not the layup that many people, even passively attentive to commercial real estate, perceive it to be,” Severino said.