According to an MReport, low supply is not the only reason that home prices are increasing. Homeowners are moving to different cities, which is making it difficult for locals to compete. A Redfin report states that this is occurring in 31 of the 34 major cities. A city that is experiencing this very drastically is Nashville. Out-of-towners moving to Nashville have budgets that are 48% higher than local buyers. Nashville’s current residents have an average of $485.500 to spend on a home, and people relocating to Nashville have roughly $720,000. Atlanta, Georgia is seeing similar trends. People relocated to Atlanta have a budget about 33% higher than current residents. Mike Estes, a Nashville Redfin agent states, “I’ve lived in Nashville for 14 years and the joke is that $500,000 to $700,000 is the new $300,000 to $500,000. But those who have lived in the area for many years typically can’t afford to spend $500,000 to $700,000 on a home, and they often move into the suburbs or even farther out to find a home within their budget”.
WHAT ELSE DID THE REPORT SAY?
Another hot spot for out-of-towners to migrate to is Austin, Texas. On average, Austin locals have budgets about 32% less than the homebuyers moving there. Sabrina Archolecas, senior asset manager for the Texas branch of RedfinNow, Redfin’s iBuying business commented, “People moving in from other parts of the country are making the market incredibly competitive and driving up prices like agents have never seen. One recent four-bedroom, 3,200-square-foot listing in Austin had 16 offers in one weekend; the list price was $575,000 and it sold for $638,000”. California had the only cities where residents have higher budgets than the people migrating into their city. For example, San Francisco, San Jose, and Fremont residents have 4% more to spend than incoming homeowners. The report mentions that local homeowners are happy that their property values are increasing, but aren’t always able to capitalize on it because they can’t afford to buy in the same area.
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Click here to read the Redfin report and learn more!
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