Migrating Buyers Are Taking Over Regional Markets With Big Budgets

Relocating Americans are going toe-to-toe with local buyers in popular metros like Nashville and Philadelphia, and with inflated budgets, newcomers are sweeping the competition and laying down their roots for good. The average out-of-town budget for Nashville home buyers in 2021 was $736,900, 28.5% larger than the $573,400 budget for local buyers, Redfin reports.

Philadelphia saw a similar ratio with a 28.4% gap between local and migrational budgets, followed by New York City, where incoming buyers had 26.5% more to spend on a home. As remote work became permanent for a growing number of Americans in 2021, higher-income buyers were able to expand their home searches, and many flocked to the most in-demand cities offering greater affordability.

The influx of out-of-towners with big budgets is contributing to the rise in home prices in popular migration destinations, pricing out many locals. Nashville home prices remain lower than many expensive coastal cities, but were up 22.6% in December from the year before. So while Nashville may be a good deal for someone coming from Los Angeles, many locals are stuck renting.

“We’re seeing a lot of out-of-state transplants, mostly from states like California that have an income tax,” said 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.”

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