People aren’t fleeing Seattle. They just aren’t moving here anymore

There’s been a lot of talk lately about an exodus from American cities, including Seattle. But is it true?

According to countless news stories, a lot of folks are kissing city life goodbye and moving to the open spaces of the suburbs, or even to more rural parts of the country. The rise of remote work since the start of the pandemic is enabling these moves.

You can find evidence that seems to back up this idea, if you’re looking for it. There are polls showing that urban dwellers are increasingly contemplating a change of scenery. City folks are spending time more than ever drooling over online real estate listings in far-off locales.

Here in Seattle, rents have nose-dived in dense, urban areas after years of steady increases.

But it’s something of a red herring, according to a new report that analyzes the most current migration data. People aren’t fleeing cities — at least not yet. While there has been an uptick in the number of people leaving urban neighborhoods in Seattle and most other large metro areas, it isn’t anywhere near what you’d describe as an exodus.

But don’t breathe a sigh of relief just yet. This doesn’t mean Seattle is doing just fine.

What’s happened instead is that, since the start of the pandemic, the flow of movers into Seattle urban neighborhoods has been reduced to a trickle.

“The outflow from Seattle neighborhoods in 2020 was very similar to what it had been in 2017, 2018, and 2019,” said Stephan Whitaker, policy economist at the Federal Reserve Bank of Cleveland, and author of the report. “What dropped off was your inflow. There were far fewer people moving into the Seattle urban neighborhoods in 2020 relative to the prior three years.”

In fact, among all the metro areas in the country, Seattle tied for the second-biggest drop in people moving into its dense, urban neighborhoods.

Whitaker was able to do this analysis because he had access to data that the general public does not: Federal Reserve Bank of New York/Equifax Consumer Credit Panel. This data, which includes address information, is updated monthly, and that makes it possible to track the movements of populations in near real-time.

Whitaker calculated an in-migration rate for all U.S. urban census tracts in the 2017 to 2019 period, and then compared that with the pandemic era — the period of March through September 2020. In nearly every urban area across the nation, in-migration dropped a lot more than out-migration.

For Seattle’s dense urban areas, in-migration declined by a monthly rate of 49 movers per 100,000 residents in 2020 when compared to previous years. But out-migration barely changed, a monthly increase of just one person per 100,000 residents.

Seattle’s rate of decline tied with San Francisco as the second largest (although San Francisco experienced a much bigger increase in people leaving its urban areas). The only place with a bigger drop in urban in-migration was San Jose: 70 fewer movers per 100,000 residents areas each month.

It hardly needs to be pointed out that Seattle, San Francisco and San Jose have certain similarities. All three are tech hubs with very high costs of living. As we’ve seen, the tech workforce has transitioned to remote work with relative ease.

Whitaker found the strongest correlation between the percentage of workers who can work remotely and the drop in in-migration (He also looked rates of COVID-19 deaths, homicide rates and the percentage of small businesses that remained open).

It makes sense. If you’re able to work remotely, commuting is no longer an issue. Why would you move into a high-rent city neighborhood in the middle of a pandemic when nearly all the good things about urban living aren’t available?

“It’s more of a phenomenon for younger people,” Whitaker said. “Maybe they got their first job or they’re taking a step up in their career, and normally that would involve moving to a new metro, but because no one’s going into the office there’s no point in doing that, so they just stay where they are.”

Interestingly, the data also shows that the trend is primarily among renters.

“Homebuyers have really not slowed down their inflow,” Whitaker said. “If you’re thinking about your future in long enough terms to be thinking about buying a condo or a house, then you’re looking past the pandemic.”

And that may help explain why Seattle home prices are still escalating even as rents are dropping.

While most metro areas saw a decline in movers into their urban neighborhoods, there were a handful of exceptions. Among them were both Spokane and Boise, Idaho.

Whitaker sees a flattening of growth for cities like Seattle for a while but expects a return to pre-pandemic trends at some point.

“That’s different from saying it’s the end of these urban neighborhoods, like nobody’s going to live there anymore,” he said.

A note on the data: Census tracts in the Seattle area that have a population density of at least 7,000 people per square mile are defined as urban in the report. While most of these are in the city of Seattle, there are a number elsewhere, including downtown Bellevue and other more densely populated areas on the Eastside and in South King County cities.