With evolving work and commuting habits on everybody’s minds, we dove into migration patterns in the Mountain Division of the West Region to explore the impact of relatively small shifts in population – driven in part by the mainstreaming of remote work – on lower-density areas. Despite attracting fewer domestic migrants than some other areas in the nation, many of these states experienced dramatic growth relative to the size of their populations, fueled by movement from more affluent areas. This change in the demographic make-up of smaller towns has already impacted local retail behavior, and is likely to continue to do so in the months and years to come.
A Region on the Rise
The Mountain Division, named for the majestic Rocky Mountains that wind their way through the area, has become a relocation hotspot in recent years. The region, which boasts wide open spaces and breathtaking natural wonders like Yellowstone Park and the Grand Canyon, encompasses eight states – Arizona, Utah, Idaho, Colorado, Nevada, Montana, Wyoming and New Mexico.
The graph below shows the total and relative changes in population for each state as a result of domestic migration, for the period between November 2019 and October 2022. And with the exception of Colorado and New Mexico, the population of each of these states has grown at least 1.5% as a result of domestic inbound migration over the past three years. In Arizona, Wyoming and Utah, net migration (meaning the number of people that moved in minus the number of people that moved out) ranged between 2.2% and 3.4%.
Idaho and Montana, for their part, saw the most explosive growth of all, with respective migration-driven population increases of 6.4% and 5.5%. And while other states in the country, like Florida, have drawn more domestic migrants in absolute terms over the past three years, these two states have grown the most nationwide relative to the size of their local communities.
Some of the movement to these states was undoubtedly fueled by COVID, as many big-city dwellers sought to ride out the pandemic in less crowded areas. However, data shows that the relocation trend persisted this year, even as the pandemic began to wane. Since November 2021, net migration for almost all the Mountain states remained positive – and even exceeded 1% in Arizona, Idaho, Montana, and Wyoming.
Perhaps unsurprisingly, the state driving the most migration to all but one of the Mountain states is California. As shown in the map above, California has experienced a 2.6% drop in population since November 2019, and many of those leaving the state have decamped to nearby areas, as well as to hotspots like Texas. Only Wyoming has a larger share of inbound migrants coming from a state other than California (Colorado).
Notably, California’s median household income (HHI) is more than 20% higher than that of all its prime destination Mountain states, with the exception of Colorado and Utah. Colorado’s HHI, for its part, is 15.4% higher than its destination state of Wyoming.
The “Zoom Town” Explosion
A deeper dive into the data also shows the outsize impact domestic migration has had on some of the region’s fastest growing micro areas. Since November 2019, the populations of Laramie, WY, Bozeman, MT, Pahrump, NV, Sandpoint, ID, and Cedar City, UT have swelled a whopping 10.4% to 15.9% as a result of inbound movement. Some of these cities, like Bozeman, have been dubbed “Zoom Towns,” a moniker used to refer to areas that have drawn a growing number of remote workers in the wake of shifting post-pandemic work patterns. With gorgeous natural surroundings and small-town vibes, these areas have attracted a steady stream of big-city folk eager to cut costs and improve their standard of living.
Here too, the absolute numbers of people moving in are not the most impressive in the region: The Phoenix-Mesa-Chandler, AZ CBSA, for example, attracted an influx of over 130K during this period, while Sandpoint, Pahrump, and Cedar City each drew in less than 7K. But given the smaller populations of these micro areas, the influx of a few thousand new residents can be enough to bring about significant demographic shifts.
In Search of Cheaper Pastures
At both the state and CBSA levels, migration has been fueled by residents of more affluent areas moving to places with lower HHIs. As we saw above, California and Colorado’s HHIs are significantly higher than that of their destination states. And on a local level too, the top two origin CBSAs driving migration to the five micro areas highlighted above all boast significantly higher HHIs than their destinations. Seattle’s HHI, for example, is 75% and 30% higher, respectively, than that of Sandpoint and Bozeman.
This influx of wealthier people appears to have contributed to rising housing prices in many of these areas, as well as to some changes in consumer behavior. Perhaps most striking has been Bozeman, where the median price of a single family home jumped from $459,000 in July 2019 to $745,000 in July 2022. While home prices have risen throughout the country over the past three years, the rate of increase in Bozeman has been particularly marked. High-end brands like Lululemon have also been taking off in the city: After piloting a pop-up venue in 2018, the chain opened its first permanent store in Bozeman in November 2019. To meet the burgeoning demand of its growing population and to encourage retailers to maximize the opportunities it presents, the city of Bozeman adopted an updated downtown improvement plan in 2019. The city has also invested in community housing initiatives.
Looking forward, domestic migration to the Mountain Division states appears poised to continue apace. As work-from-home and hybrid arrangements become ever more common, and price concerns make it increasingly difficult to remain in big urban centers, people are likely to continue to seek out cheaper – and more pastoral – alternatives. These population shifts, which can have a particularly tangible impact on smaller population centers, create significant opportunities for retailers and other businesses eager to reach new markets.
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