Out-of-town home buyers with deep pockets
- An influx of out-of-towners with big budgets is contributing to the rise in home prices in popular migration destinations, pricing out many local buyers
- The average out-of-towner moving to Nashville in 2021 had $736,900 to spend on a home, 28.5% higher than the $573,400 average budget for local buyers
- Philadelphia, with an average out-of-town budget of $559,200—28.4% higher than the average local budget. It’s followed by New York City, where the average out-of-towner had a 26.5% higher budget than the average local resident, and Atlanta, where migrants had a 26.1% bigger budget
- Miami rounds out the top five, with an average out-of-town budget 25.1% higher than that of locals. Out-of-towners have higher budgets than locals in 42 of the 49 cities included in Redfin’s report.
- The upswing in people moving from one area to another since the start of the pandemic is due partly to remote workers moving to relatively affordable areas in search of larger homes with more outdoor space. Out-of-towners frequently have bigger budgets than local residents because they may come from a place with higher salaries, and/or they may have sold a home in a more expensive city.
- That’s good news for people moving from a place with sky-high home prices like coastal California to an area that’s still comparatively affordable, like Nashville or Atlanta. For instance, the typical home in Los Angeles—the most common origin of people moving to Nashville—sold for $950,000 in December versus $411,000 in Nashville. The typical home in New York City —the most common origin of people moving to Atlanta and Miami—sold for $785,000 versus $385,000 in Atlanta and $459,000 in Miami.
- “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.”
- Locals had higher budgets than out-of-towners in seven of the 50 cities in the analysis, most of which are in California: Four Bay Area cities (Fremont, Pleasanton, San Jose and San Francisco) and Riverside, plus Baltimore and Frisco, Texas.
By Brenda Richardson, Senior Contributor at Forbes
Real estate biggest home prices continue
A recent blog, in February 2022, mentioned the 8 Seattle area suburbs with the biggest home price increases in 2022 so far! Mentioned was Bellevue and how it passed Manhattan in housing prices!
- Bellevue prices shot up a ridiculous 28% year-over-year, reaching a median price of $1.37 million for all sales of homes and condos in December. That’s nearly double that of Seattle. It also means tech-fueled Bellevue has now passed the borough of Manhattan in housing prices by nearly $100,000. In fact, of cities with more than 100,000 population, Bellevue (pop. 152,000) is now more expensive than all of them save for San Francisco, and we expect that last record to fall sometime this summer, with Bellevue claiming the absolute top spot as the most expensive city in America.
Continuing this trend, Snohomish and Pierce counties saw similar percentage gains year over year. The average price of a single-family home in Snohomish County rose from $600,000 in 2020 to $741,000 last year, a 23.5% increase. Pierce County saw a 19.3% increase from $467,000 in 2020 to $577,000 last year, as mentioned in a blog in early February 2022 Hottest Seattle suburbs home prices suge by up to 30% (See the breakdowns here)
Monroe in Snohomish County is up 25.1%. Neighborhood deep dive with Liza Alley HERE
- At month-end, inventory reached a meager 3,092 active listings, down more than 30% from a year ago.
- King County had the steepest drop in active listings, shrinking nearly 59% from a year ago.
- The market remains virtually sold out.
- The imminent rise in interest rates has buyers scrambling to find properties to buy.
- No relief in sight by way of increased inventory to meet demand.
Housing inventory plunges as housing availability crisis continues blog in Feb 2022
Seattle Agent Magazine makes several valid points
- Seattle had the third-highest bidding war rate among large metro areas in the nation during January
- Competition really ramped up again in the second half of January because buyers started to feel desperate to lock down homes while rates were still relatively low
- January was the most competitive month on record, the report said. Seventy percent of offers written by Redfin agents faced bidding wars last month, an increase of 67.7% from December and up 61% from last year.
- Buyers are battling it out for the few homes on the market in an effort to lock in relatively low payments before rates move even higher
- Fifty-seven percent of homes sold during the four-week period ended Feb. 13 had an accepted offer within the first two weeks of being listed. During that same time period, asking prices rose 16% from last year to a new high as new listings fell 8% to a new low.
The U.S. mortgage rates hit the highest level in two years By Liza Alley
Home buyers continue to stuggle in this real estate market
With such low inventory, buyers are facing "Buyers Fatigue" - The Western Washington housing market is extremely competitive. The current market value in most neighborhoods is quickly increasing, and the sale price of each condo, townhouse or single-family home sets a precedent for the next one in that neighborhood. New home buyers can fear overpaying when advised to bid above the asking price on their first offer. The cold hard truth is that some houses are selling for upwards of $100,000 over the asking price. Home sellers have the leverage and the luxury to pick whichever offer has the highest price and the fewest subjects.
In a market like this, we looked at the data on thousands of offers agents for The Cascade Team wrote and received in the last two years to see how the strategies we track affected home buyers’ odds of winning a bidding war:
Here are various processes of buying a home and some strategies.
Snohomish County on the rise
I feel strongly that with how the urban housing prices have been going up and people continuing to battle to get into a house near the cities, there will be a sustained drive to move further out for more affordability. Plus, the pandemic affording many people to work at home has permitted this migration to the suburbs. We see signs from many tech companies that remote work will (at least in part) will be here to stay. By not having to drive into the city as often, residents have more freedom to buy more house, more land and enjoy the space that municipalities farther out in the county offer. Now certainly could be the right time to get into a spacious home in Snohomish County, where your dollar goes farther, and there is less competition.
It is clear that people are choosing to go (or stay) further out. As time goes on, it’s becoming more apparent that consumers are getting more attracted to staying (or moving) further out from the large population centers.
The trend of moving (and staying) a little further out from the large cities is a long-term play. Brought on by the pandemic, the ability for many to work from home and the relative strength that your dollar has in the suburban real estate markets will continue to pay dividends for people in years to come. The eastern parts of the eastside, Snohomish County, and other less populated areas are offering great values for large properties with amenities still close at hand.
This real estate trend continues
Monroe is becoming a more attractive location to be in. Snohomish County saw an increase of over 10% in sale prices, with an average of seven days on the market, and that trend continues. People are starting to see the benefits that come with moving out a little further. Monroe, within the past ten years (2010-2020), the population increased by 13.84%. It is becoming more and more apparent with newer home developments like Wild Sky Estates (as well as many others that have been built recently) that more people are continuing the trend of moving further out. With great attractions like access to Woods Creek, the Skykomish River Centennial Park, wonderful parks like Lake Tye and Lord Hill Park (only 15 min away from Main St. Monroe), Monroe is an outdoors person's dream. There are also activities from disc golf to taking someone to the Lagacy farm and meeting some animals!
Monroe is ideally located and reasonably close to many hikes like Wallace Falls (only 24 min away). Or stay local and head to Al Borlin Park, which has great reviews, or Frylands Park, which allows you to walk the trail around the lake. Some of Washington's favorite vacation places are much closer as well. Places like Lake Chelan, an hour closer than starting from Seattle and Leavenworth, just over 1.5 hours from Monroe.
Is it time to sell your home? Consider moving out a little further
Thinking of selling in today's real estate market? Wondering where you should go next? Consider Monroe. In a real estate market like this, it may be wiser to consider moving further out of the city. It may be a nightmare trying to buy in most of the bigger cities in Washington, but going further out into places like Monroe (or other Snohomish County locations) may be easier on many levels.
Contact me, and let me help answer some of the buying and selling questions you keep asking yourself.
Posted by Liza Alley on
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