Redfin analysis of mortgage data found
homebuyer incomes soared in pandemic boomtowns like Boise, Austin
and parts of Florida, largely due to remote workers moving in from
pricey job centers
(NASDAQ: RDFN) — The typical Boise homebuyer earned $98,000 in
2021, up 24.1% from 2019, according to an analysis of mortgage data
by Redfin (www.redfin.com), the technology-powered real estate
brokerage. Boise experienced the biggest homebuyer income increase
of the 100 most populous U.S. metros, an uptick caused mostly by
remote workers moving in from pricey coastal job centers during the
pandemic and intensifying competition.
Boise is followed by several other pandemic-fueled migration
hotspots: Austin, a quartet of Florida metros (Cape Coral, North
Port, West Palm Beach and Miami), Phoenix, Stockton, CA, Tacoma, WA
and Salt Lake City. In all of those places, homebuyer income growth
was more than double the nationwide average of 6.8%. Redfin
analyzed median household incomes for homebuyers who took out a
mortgage in 2019 versus 2021 based on data from the Home Mortgage
Disclosure Act.
Metro area
Median homebuyer income growth (2019 to
2021)
Median homebuyer income (2021)
Median home-price growth (December 2019
to December 2021)
Boise, ID
24.1%
$98,000
53%
Austin, TX
19.1%
$137,000
48%
Cape Coral, FL
18.5%
$96,000
48%
North Port, FL
18.5%
$109,000
47%
West Palm Beach, FL
17.0%
$110,000
33%
Miami, FL
16.9%
$104,000
38%
Phoenix, AZ
15.9%
$95,000
48%
Stockton, CA
15.3%
$113,000
34%
Tacoma, WA
15.1%
$107,000
39%
Salt Lake City, UT
13.8%
$91,000
41%
National
6.8%
$94,000
29%
The outsized income increases in those places–all popular
migration destinations–are due largely to relocating remote workers
with high hometown salaries. An influx of people moving in also
intensified competition for a limited supply of homes, making it so
high-income local buyers were most likely to successfully compete
with out-of-towners. Affluent out-of-towners have contributed to
rapidly rising home prices in many of those metros, pricing out
many local buyers with lower incomes. The average out-of-towner
moving to Miami in 2021, for instance, had 25% more to spend on a
home than the average local, and newcomers to Phoenix had 21%
more.
“For white-collar workers earning high salaries, remote work is
a huge financial boon. It enables them to move from a tech center
like San Francisco to a more affordable part of the country like
Boise or Salt Lake City, get more home for their money and save
some for a rainy day,” said Redfin Senior Economist Sheharyar
Bokhari. “It can have the opposite effect on locals in those
destinations–especially renters–who are watching from the sidelines
as home prices skyrocket while their income stays mostly the
same.”
“Partly because of soaring home prices, Phoenix and Miami have
some of the highest inflation rates in the country,” Bokhari
continued. “That will eventually diminish the financial advantage
of moving to these places for out of towners. High inflation also
cuts into budgets for locals, who are spending more on things like
food and fuel and saving less for an eventual down payment.”
Home prices shot up over twice as fast as homebuyer incomes in
Boise, rising 53% to $485,000 from December 2019 to December 2021.
Prices rose 48% in both Austin and Cape Coral. Home-price growth
outpaced homebuyer income growth in all 10 metros on this list,
with prices rising more than 30% throughout the pandemic in each
one.
Housing markets in pandemic boomtowns are starting to
slow
While local incomes rose and home prices skyrocketed in 2021,
housing markets in many of those pandemic boomtowns are faltering
as high mortgage rates and unsustainable price growth tame
demand.
Boise, Austin, Cape Coral, North Port, Phoenix and Tacoma are
among the 20 housing markets that cooled fastest in the first half
of 2022. And Boise, Cape Coral, North Port, West Palm Beach, Miami,
Stockton and Salt Lake City are among the 25 housing markets most
susceptible to home-price declines if the U.S. enters a recession.
But even though they’re susceptible to a recession-driven downturn,
these places are unlikely to see housing-market crashes precisely
because homebuyers there have relatively high incomes.
“People are still moving in from California and they still have
enough money to buy nice homes in desirable neighborhoods,
sometimes with all cash,” said Austin Redfin agent Gabriel Recio.
“But the days of homes selling for 25% over asking price with
multiple offers are over. Buyers are no longer as eager now that
mortgage rates are up and there’s buzz in the air about the slowing
housing market. Local buyers–and even buyers coming from out of
town–now have a chance to take their time and buy a home at asking
price or even under asking price.”
Homebuyer incomes fell in San Francisco
Homebuyer income rose during the pandemic in 94 of the 100 most
populous U.S. metros. It fell slightly in San Francisco (-1.5% from
2019 to 2021) and Baton Rouge, LA (-1.2%). It stayed the same in
Akron, OH, Des Moines, IA, Louisville, KY and New Haven, CT.
Homebuyer income fell in San Francisco for much the same reason it
rose so much in popular migration destinations: Remote workers with
high salaries left expensive coastal cities for more affordable
areas during the pandemic.
The full report is available at:
https://www.redfin.com/news/homebuyer-incomes-increase-remote-work-2021
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 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
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version on businesswire.com: https://www.businesswire.com/news/home/20220804005311/en/
Redfin Journalist Services: Angela Cherry, 913-638-8249
press@redfin.com
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