In the country’s hot spots for inbound migration, out-of-town homebuyers are bringing nearly 30% more to spend homes than locals, making for lopsided competitions in an already torrid marketplace, according to Redfin.
Take Nashville, which Redfin found to have the largest gap in homebuying budgets between migrants and locals. The average maximum budget for incoming home seekers is $736,868, compared to just $573,382 for locals — a 28.5% difference. Atlanta, another popular destination for relocating homebuyers, has an average maximum budget of $717,243 for migrants versus $568,873 for locals, a difference of 26.1%.
That’s good news for people moving from expensive gateways and coastal areas with astronomical home prices. For example, the median home price in Nashville was $411,000 in December, while the typical home in Los Angeles (the most common origin for people moving to Nashville) sold for $950,000 in the same month.
But for locals, opportunistic home seekers are causing headaches not only by pricing them out of competitions for homes but also by driving prices firmly upward. Nashville prices, for instance, were up 22.6% year over year.
“We’re seeing a lot of out-of-state transplants, mostly from states like California that have an income tax,” said Nashville Redfin agent Hope Geyer. “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.”