Since the onset of the pandemic, home buyers have been ditching pricey cities in droves and moving to new spots that are often more affordable with a better quality of life. As well as bringing their luggage, many, if not most, of these buyers are moving with deeper pockets than the locals, and in some cities their larger purchasing power is significant, according to new data.
In the migration hot spot Nashville, the average out-of-towner moving to the Tennessee city last year had $736,900 to spend on a home, 28.5% higher than the $573,400 average budget for local buyers, and the largest disparity of the 49 cities analyzed in a report Tuesday from Redfin.
The adoption of remote work has opened up the country to buyers, but the result of new residents with big budgets is soaring home values that are pricing out many locals, according to the online property portal.
In Nashville, for example, while home prices remain lower than many expensive coastal cities, they were up 22.6% annually in December to an average $411,000.
“We’re seeing a lot of out-of-state transplants, mostly from states like California that have an income tax,” Hope Geyer, a Redfin agent in Nashville, where there’s no state income tax, said in the report.
“People moving from the West Coast will pay way over asking price without batting an eye. In their eyes, they’re getting a deal,” she said. “It’s really hard for locals to compete right now, and it can be devastating for first-time buyers who aren’t able to offset high prices by selling a home before they buy a new one.”
Philadelphia logged the second-biggest spending gap in the U.S., with an average out-of-town budget of $559,200, which was 28.4% higher than the average local budget of $435,609.
It’s followed by New York City, where the average out-of-towner had a budget 26.5% higher than the typical local buyer; Atlanta, where migrants had a 26.1% bigger budget; and Miami, with an average out-of-town budget 25.1% higher than that of locals, the report said.
Article Source: Mansion Global
