Newcomers to Philadelphia Have Nearly 40% More to Spend on Homes Than Locals
July 28 2022 - 8:00AM
Business Wire
Out-of-towners have bigger budgets than locals
in relatively affordable destinations like Philadelphia, Atlanta
and Dallas because many are remote workers moving in from more
expensive places
(NASDAQ: RDFN) — The average out-of-towner moving to
Philadelphia in the first half of 2022 had $588,000 to spend on a
home, 39% higher than the $422,000 average budget for local buyers,
according to a new analysis from Redfin (www.redfin.com), the
technology-powered real estate brokerage. That's the biggest gap
among the cities included in the analysis, which is based on the
average maximum list-price filters for homes set by Redfin.com
users in their saved searches.
New York comes next, with an average out-of-town budget of $1.3
million, 31% higher than the average local budget. It’s followed by
Atlanta (30% higher), Dallas (22% higher) and Portland, OR (18%
higher). Out-of-towners had higher budgets in 19 of the 23 cities
in this analysis.
Newcomers to Philadelphia have significantly higher budgets
because they typically come from coastal job centers with high
salaries and cash on hand from selling a high-value home.
Philadelphia’s popularity with affluent out-of-town homebuyers shot
up at the beginning of the pandemic as remote work made it feasible
to move to a more affordable area while keeping a high hometown
salary. New York is by far the most common origin for
out-of-towners moving to Philadelphia, and it also attracts a lot
of migrants from Washington, D.C. and Los Angeles.
The typical Philadelphia home sold for just $300,000 in June,
less than half of New York’s $705,000 median sale price. Prices in
Philadelphia have also grown slower: They’re up 20% from the
beginning of the pandemic, compared with a 26% jump in New York and
a 38% nationwide bump.
“Even though the housing market has slowed, the share of
homebuyers moving to different parts of the country has not,” said
Redfin Deputy Chief Economist Taylor Marr. “That’s partly because
home prices and mortgage rates have increased so much that
homebuyers with the flexibility to relocate are seeking out
affordable areas. Someone moving from Los Angeles to Philadelphia
may have a higher monthly housing payment than they would have six
months ago, but it’s still much lower than it would be in coastal
California.”
“The market looks different for locals, many of whom are priced
out or driven to search in the suburbs because both home prices and
mortgage payments have risen significantly in the last year,” Marr
continued. “But local buyers may get a break as the market cools
and competition slows.”
Atlanta and Dallas are also popular pandemic-fueled migration
destinations. Dallas was the 10th most popular destination in the
second quarter, and Atlanta came in at number 12.
Affluent New Yorkers are moving back to the city with big
budgets
The story is different in New York, one of the priciest metro
areas in the country. One reason why house hunters in New York have
bigger budgets than locals: Many of those out-of-towners actually
are locals–and they’re wealthy locals.
“A lot of the people who can afford to buy homes in New York
right now are those moving back to the city after a pandemic
hiatus, and they likely have more money than the locals who stayed
put,” said Masha Berman, a Redfin agent in New York. “I’m also
seeing a lot of out-of-town investors and affluent pied-a-terre
buyers.”
Locals have bigger budgets in the Bay Area
Locals had higher budgets than out-of-towners in four of the 23
cities, all of them in California and three in the Bay Area.
The average budget for locals in Fremont, CA (located in the
East Bay) was about $1.9 million, 20% higher than the average
migrant budget and the biggest gap among the cities in this
analysis. Next comes San Francisco, where the average local budget
was about $2.1 million, 12% higher than the average migrant budget.
It’s followed by San Jose (4% higher) and Irvine (3% higher).
To read the full report, including methodology and additional
metro-level data, visit:
https://www.redfin.com/news/migrant-local-homebuying-budget-2022/
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
instant home-buying (iBuying), rentals, lending, title insurance,
and renovations services. We sell homes for more money and charge
half the fee. We also run the country's #1 real-estate brokerage
site. Our home-buying customers see homes first with on-demand
tours, and our lending and title services help them close quickly.
Customers selling a home can take an instant cash offer from Redfin
or have our renovations crew fix up their home to sell for top
dollar. Our rentals business empowers millions nationwide to find
apartments and houses for rent. Since launching in 2006, we've
saved customers more than $1 billion in commissions. We serve more
than 100 markets across the U.S. and Canada and employ over 6,000
people.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20220728005321/en/
Redfin Journalist Services: Erin Osgood, 206-588-6863
press@redfin.com
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