Study: Out-of-Town Buyers Have More Money
It’s hard for some current Fla. residents to compete with new ones. In Miami, the average newcomer can spend 25.1% more – but in Jacksonville, it’s only 1.7%.
SEATTLE – The average out-of-towner moving to Miami in 2021 had a budget of $972,470 to spend on a home compared to $777,102 for the average Miami resident – a 25.1% difference that favors newcomers in an area where the median home sells for $459,000, according to a Redfin study of its listings.
The study found the biggest difference in Nashville in 2021 where newcomers had 28.5% more to spend on a home – $736,900 compared to locals who had an average budget of $573,400.
Next comes Philadelphia (28.4% more than local buyers), followed by New York City (26.5% more) and Atlanta (26.1%). Miami rounds out the study’s top five. Overall, out-of-towners have higher budgets than locals in 42 of the 49 cities included in Redfin’s report.
In addition to having more money on average, demand from out-of-town buyers also rose during the pandemic after more people gained the ability to work remotely. Many out-of-towners come from higher-cost, higher-pay areas and choose destinations, in part, because their money can go further.
The result, study writers say, is that home prices in high-demand areas are rising to meet the new demand.
“We’re seeing a lot of out-of-state transplants, mostly from states like California that have an income tax,” says Hope Geyer, a Redfin agent in Nashville, where there’s no state income tax. “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.”
New residents vs. current residents in 4 Florida metros
- Miami: 25.1% (Newcomers’ average budget of $972,47 vs. residents’ budget of $777,102)
- Orlando: 17.8% ($555,216 vs. $471,145)
- Tampa: 9.2% ($575,429 vs. $527,016)
- Jacksonville: 1.7% ($409,897 vs. $402,872)
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