Out of town buyers have more to spend on homes than local buyers in 42 of 49 cities analyzed by Redfin, according to a report released Tuesday.
The analysis reviewed average maximum list-price filters for homes set by Redfin.com users in their saved home searches and it included cities in the U.S. with at least 3,000 Redfin.com home searchers from inside the metro and 3,000 from outside the metro last year.
In many relocation hotspots across the country, such as Atlanta and Miami – which frequently appear on Redfin’s list of top 10 most popular migration destinations – out of town buyers have nearly 30% more to spend on homes than locals.
Nashville, which is seeing a spike in popularity with a net inflow of roughly 4,000 during the fourth quarter of 2021, compared to 2,900 during the fourth quarter of 2019, topped the list with the average out-of-towner having $736,900 to spend on a home, which is 28.5% higher than the $573,400 average budget for local buyers.
In Philadelphia, the average out-of-town buyer had a 28.4% higher budget than a local buyer and in New York City the average out-of-town budget was 26.5% higher than the average local. In Atlanta and Miami, out-of-town buyers had budgets that were 26.1% and 25.1% higher than local buyers, respectively.
Due to an increase in remote work flexibility, people across the country are looking to relocate to less expensive metro areas, while maintaining their current salary. A typical home in New York City, which is the most common origin of people moving to Atlanta and Miami, sold for $785,000 in December, compared to $385,000 in Atlanta and $459,000 in Miami, according to Redfin.
“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 a statement. “People moving from the West Coast will pay way over asking price without batting an eye. In their eyes, they’re getting a deal. 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.”
In seven of the cities analyzed, locals had bigger budgets than out-of-towners. Perhaps unsurprisingly four of those cities are in California (Fremont, Pleasanton, San Jose and San Francisco), with Baltimore, MD and Frisco, TX being the final two.