The 3 types of southwestern cities that won the pandemic housing market

Urban Buffalo Bayou Park offers downtown Houston a green oasis for recreation. John Coletti/Getty Images
  • The American southwest boomed through the 2010s. Certain people and places are winning out.
  • Long-growing cities like Austin and Denver thrived, while smaller urban centers garnered fresh appreciation.
  • Here are the cities that benefitted most from the decade-long migration and the pandemic housing surge.
  • See more stories on Insider’s business page.

The American Southwest was already the hottest place to be. COVID-19 turned that up to 11.

Several of the fastest-growing metro areas over the last decade were in the southwest corner of the country. Warm weather, attractive home values, and a burgeoning tech scene pulled in millions of Americans looking to sample the country’s less densely packed locales.

The Austin-Round Rock-Georgetown region of Texas saw the second-largest jump in population between 2010 and 2020 among America’s 384 metro areas, according to Census data published in August. The greater Dallas, Phoenix, and Denver areas also experienced outstanding growth. And as moving Americans faced affordability pressures, areas on the urban fringe flourished.

The ten-year boom drove southwestern home prices sharply higher. Yet the pandemic sparked a new rally for the area. And as masses of Americans swarmed to the southwest, several places reaped rewards.

Here are the cities and towns that won out from the southwestern migration.

1. The pre-pandemic boomtowns

For several southwestern metros, the pandemic only extended a decade of strong population growth and booming industry.

Cities including Phoenix, Las Vegas, Austin, Dallas, and Houston saw massive growth during the crisis as people fled coastal employment hubs for better value and warmer weather. All five cities enjoyed net move-ins from March 2020 to June 2021, according to USPS mail forwarding data collected by Jefferies.

The urban centers’ appeal wasn’t dented by COVID, and several pre-pandemic movers see the influx of new residents as a major boon.

“A lot of people are super new and in the same boat as you. They’re trying to figure out the city, try new things, and make new friends, and set up a life here,” Julie VerHage-Greenberg, a co-founder of Fintech Today who moved from New York to Austin with her husband in April, said. “That makes it much easier to be doing the same thing.”

The major hubs’ years of development also made them perfect for the work-from-home zeitgeist, Ali Wolf, chief economist at housing analytics firm Zonda, told Insider. Once solely relegated to Silicon Valley, the tech sector now has nascent hubs in Phoenix, Austin, and Dallas.

“If you had individuals leave the Bay Area or Seattle who now getting called back to their jobs, they may be able to quit and stay in Austin. That’s important, to allow people some economic freedom,” Wolf said.

2. The COVID-era migration magnets

Some southwestern cities didn’t experience the same booms through the 2010s as others. That lack of a boomtown reputation, however, paid dividends during the pandemic.

Cities including San Antonio and Tuscon became “migration magnets” during lockdown by attracting a healthy mix of out-of-state migrators and in-state movers, Wolf said. These cities offered more affordable housing than many peers, and their urban environments drew Americans still looking to avoid suburban and rural areas.

“San Antonio is becoming a spillover and a more affordable alternative for individuals within the state who are looking to move,” Wolf added.

3. The exurbs

Yet not all southwestern transplants could afford densely packed cities or their glitzy suburbs. Cue the exurbs.

Exurban areas thrived during the pandemic. The locales combine affordable housing, greater space, and still-manageable commute times to urban centers. Exurbs had long been neglected for their distance from cities and lack of development, but the shift to remote work saw city-dwellers flock to the areas.

Think cities like Goodyear or Buckeye, AZ, towns located about 20 and 36 miles (58km) from Phoenix, respectively. Both were long overshadowed by their metropolitan neighbor to the east. But as their popularity balloons, developers and movers alike see promise in the long-neglected areas.

Merging the southwestern boom with the exurban shift explains why so many moved to the not-quite-rural, not-quite-suburban areas, Wolf said. Whether from locals priced out of their cities or out-of-towners seeking more value, the region’s exurbs saw huge appreciation, she added.

“Those areas lost popularity during the housing bust and they’re becoming attractive again,” she added. “A lot of homebuilders believe that this time is different for those areas because of work-from-home and because of the increased migration.”