With home prices continuing to rise at a record-breaking pace, there are quite a few housing markets where homebuyers’ money is not going as far as it used to. Luckily, there appears to be a solution: moving to a new city where you can get more for your money.
And thanks to the rise of remote work in 2020, moving to a new city to find the house of your dreams isn’t quite as daunting as it used to be.
In fact, there are a number of housing markets where buyers moving from another city have a much higher budget than in-town buyers.
According to a new report from Redfin, out-of-towners’ housing budgets are higher than those of current residents in more than 30 of the biggest markets in the country.
Leading the way was Nashville, where the average budget for someone moving to Music City was $719,500, 48% higher than the average budget for local buyers, $485,500.
There were three other markets where the out-of-town buyers’ budget exceeded the local buyers’ budget by more than 30%: Atlanta; Austin, Texas; and Houston.
Nashville, Atlanta, and Austin are also frequently among the top 10 most popular cities for people moving from one city to another, according to Redfin.
Per Redfin’s data, the number of people considering moving to each of those cities was up by more than 40% year-over-year at the end of 2020, indicating that those cities are gaining in popularity from their already popular position.
According to Redfin Chief Economist Daryl Fairweather, many of the people searching for homes in these areas are moving away from more expensive cities and finding that their money can get them more house in a new city.
“Many homebuyers are now able to widen their searches to parts of the country that weren't options when they were tied to offices in expensive cities, and the consequences for popular destinations will be numerous,” Fairweather said. That’s great news for remote workers because their San Francisco salary can buy a lot more in Nashville or Austin than the Bay Area.”
But the “influx of wealthy homebuyers” isn’t all good news for those local markets, Fairweather said.
“Homeowners will see the value of their homes rise, but first-time homebuyers will face tougher competition from out-of-towners with big budgets,” Fairweather said. “Local economies will change as well, with people like construction workers, plumbers, childcare workers and landscapers seeing increased demand and increased prices for their services—but that would mean higher prices for locals as well.”
Other cities where out-of-town buyers’ budgets were larger than local buyers include Denver, Philadelphia, Phoenix, Dallas, Charlotte, Chicago, and Las Vegas.