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Priced out of coastal areas, homebuyers look inland

Homebuyers looking for affordability in locations with jobs and outdoor activities

Engel & Völkers, a Germany-based real estate brokerage focused on luxury residential and commercial property, on Wednesday released a market report which found eight markets in the U.S. that are attracting homebuyers from coastal markets.

These eight markets are: Northwest Arkansas, Little Rock, Des Moines, Kansas City (Kansas and Missouri), Omaha, Oklahoma City, St. Louis and Tulsa, according to the company. These areas offer a combination of a strong business presence, food hubs and plentiful outdoor activities, including local and national parks.

High home prices in coastal areas, high demand, low inventory and remote work are primary factors behind buyers searching for homes inland.

Some salient features of each market as given in the report, are:

  1. Northwest Arkansas: This region refers to five metro areas in Benton and Washington counties, comprising Bella Vista, Bentonville, Fayetteville, Rogers, and Springdale. It is deemed to be one of the fastest-growing economies in the country, being home to three Fortune 500 companies among other businesses (including Walmart). Since 2010, there has been a 24.2% population increase in Northwest Arkansas. 
  1. Little Rock: Located in Central Arkansas, this region includes Cabot, Conway, Benton, Bryant, Jacksonville, Maumelle, and North Little Rock/Sherwood. New residents and out of state investors are drawn to relatively affordable prices of the area, which while hasn’t been impacted by some of the tougher economic conditions in other parts of the U.S. In June this year, home prices rose by more than 17%, but the median home price is still $255,000 as compared to $428,700 in the rest of the country. 
  1. Des Moines: The market here has been growing since before the “housing boom” in 2020, with a 7.3% increase YoY in median home price, which reached $188,026 in September. Jobs opportunities, affordable housing and a Midwestern lifestyle are some reasons buyers are attracted to this region. 
  1. Kansas City, Kansas and Missouri: Home values appreciated by 102% over the last decade in the greater Kansas City metro area with a median home price of $315,000. Even though home prices here have reached the highest level in years, they are below the national median home price and the market offers a varied inventory with opportunities for buyers and investors.
  1. Omaha: Median home price in Omaha rose by approximately $100,000 since 2016 but its homeownership rate of more than 58% exceeds the national average. The region also offers jobs and an affordable cost of living.
  1. Oklahoma City: This region offers a combination of food hubs, economic stability and “highly rated” schools and saw 48.25% price growth since 2018. According to MLS data, the median home price rose by 14.6% YoY and reached $267,000 in June 2022. Home inventory is low here and due to high interest rates, the market has cooled, but is still affordable compared to the national average. 
  1. St. Louis: The St. Louis market has experienced high home price growth and low inventory. But St. Louis County is a sought-after market for its home values. St. Charles County has a lower price point and its outer reaches have more new builds than the rest of the region. 
  1. Tulsa: Home prices have been rising here over the past two years, with a low market absorption rate. However, the city is starting to experience low buyer demand with stable prices. In June 2022, home prices in Tulsa increased by 7.8% compared to 2021, with a median price of $283,000.

“As the way consumers live and work continues to evolve, new markets are beginning to grow prominence on a national scale,” said Anthony Hitt, president and CEO of Engel & Völkers Americas, in a statement. “Luxury is the ability to live a lifestyle you enjoy, and for many, that means looking toward markets such as these, which provide the freedom to pursue their chosen lifestyles with greater purchasing power to invest in a home.”

A recent Redfin report found Sacramento was the most popular relocation destination for homebuyers, followed by Miami, Las Vegas, San Diego and Tampa. Nearly a quarter of Redfin home buying users (24.2%) in the U.S. are looking to move to a new metropolitan area in Q3 of 2022.

Engel & Völkers operates in 275 locations and has more than 6,200 real estate advisors in the U.S. It recently announced opening a new real estate shop in Gulf Shores, Alabama.