Millions of Americans have moved to the Southeast over the past few years, bringing immense wealth and transforming real estate markets in places like the suburbs of Dallas and Atlanta. This Sun Belt migration has created a longer-term opportunity in parts of the north as well.It's long been common for well-off residents of the Northeast and Midwest to vacation in warmer places such as Florida and Arizona during the winter. Thanks to growing wealth in the Sun Belt and the increasingly oppressive hot summers of the South, it’s going to get more attractive for southern residents to trek up north to escape the heat.
There's something intuitively obvious about this reverse snowbird migration. Look at the headlines. Phoenix is approaching its record for the number of consecutive days spent over 110 degrees. Florida is setting records of its own, raising the temperature of the water surrounding the state to alarming levels. As an Atlanta resident, I can attest that July and August are not the most pleasant times of the year to live here. Even if you're not a fatalist about climate change, already hot summers and at least more modest warming to come will act as a tailwind for southerners looking to beat the heat.
The nature of the migration and wealth shift we've seen over the past few years makes the case even stronger. Someone moving from New York to Florida or Wisconsin to Arizona is likely familiar with the summer vacation communities that people in New York and Wisconsin spend time in. There’s a good chance they still have friends and family back home they'd like to keep in touch with. And it makes more sense to travel back in July rather than January.
There’s more than a theory behind this idea. In 2022, more out-of-state homebuyers in Maine came from Florida than from New York, and more came from Texas than Connecticut. Duluth, Minnesota, which sits on Lake Superior and where the average summer high temperatures are only in the 70s, has become increasingly popular with out-of-state homebuyers. Door County, Wisconsin, which sits on Lake Michigan, has a growing national profile.
Even within southern states, migration patterns have been changing due to the climate. Flagstaff, Arizona, which is at an elevation of nearly 7,000 feet and where summer temperatures are 25 degrees cooler than Phoenix, is grappling with a housing shortage in part due to Phoenix residents looking for an escape during the summer.
There's an opportunity here — if northern towns want it, that is — to transform some of the communities near lakes or the northern Atlantic Ocean to revolve even more around tourism, catering to southerners who may or may not be familiar with places like Maine, Michigan, or Minnesota. Historically, Florida and Arizona have welcomed winter travel from northerners, but the reverse may not necessarily be true. Jokes about “the Florida man” coming to town write themselves.
Ultimately, this trend could be even bigger than northerners heading south for the winter. It's easier for families to spend extended periods of time away from home in the summer months when kids are out of school. Households with the wealth to afford second homes are more likely to have the kinds of well-paying knowledge jobs that allow stints of remote or hybrid work.
Of course, not all locals will welcome this trend and the increased costs, home values, and congestion it will entail, but wealthy southerners looking to beat the heat are going to figure out some way of doing so.
____
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Conor Sen is a Bloomberg Opinion columnist. He is founder of Peachtree Creek Investments.
