It’s a challenging time to be a home buyer in the U.S.—and let’s be honest, that’s putting it mildly. Tightfisted lenders and super-high home prices aren’t helping matters. But despite all of that, the allure of certain markets is still strong enough to motivate people to pull up stakes and move to a different state altogether.
So what are the magnetic hot spots that people are most interested in moving to these days? And what’s driving them to consider these places? The data team at realtor.com® decided to find out.
“With prices now having risen for seven consecutive years, affordability has become top of mind and is driving people not just in their local markets, but when they’re shopping to relocate,” says Chief Economist Danielle Hale of realtor.com.
But affordability is relative, she points out: “It’s not just the cheapest markets that are attracting attention, but markets that are similar to, but cheaper than, places people are looking to leave.”
Out-of-state buyers were mostly attracted to lower-cost markets in the South and West, according to realtor.com’s new Cross Market Demand report. Seven of the top 10 markets attracted nonlocal buyers looking at homes whose median price was 3% to 34% cheaper than the median home price in their home markets. The ranking is based on which markets got the most views on realtor.com from outside their state in the second quarter of 2019. (Metropolitan markets typically include some nearby smaller towns.)
Let’s zoom in on the trends!
Metros where out-of-towners most want to live
Claire V. Widman
Trend 1: The Palmetto State is scorching!
Surprise! It turns out that South Carolina, with its booming employment, moderately priced homes, low taxes, and balmy weather, seems to have just about everything needed to lure buyers from other states these days.
At the top of the list is the perennial tourist fave, Charleston.
Two of South Carolina’s other metros also made the top 10 of the rankings: Columbia (No. 4) and Greenville (No. 8).
Employers are flocking to South Carolina, which flaunts its business-friendly policies and is aggressively courting companies to relocate there, and employees seem ready and willing to go along for the ride.
“Folks can afford to live well in the state, where homes are still affordable, property taxes are low, and cost of living is reasonable,” says Ryan Dietz, director of the master of real estate development program at Clemson University, in the Greenville area.
Bonus: The lifestyle is generally more laid-back than in some other big cities.
There’s also a variety of places to live, including coveted coastal communities.
“In South Carolina, you can go to the beach in the morning and at lunch leave for the mountains,” Dietz says.
Charleston, in particular, charms all comers with its gorgeous historic homes, cobblestone streets, moss-draped trees, and wide, sandy beaches. Readers of Conde Nast Traveler named it the Best Small City in the U.S. in 2018 for the eighth year running, with the magazine’s editors calling out its world-class cuisine, beaches, and vibrant contemporary art scene.
Meanwhile, Columbia is proving to be the main bargain alternative for interstate house hunters outside the West, with home prices 25% below the national median. The capital of South Carolina doesn’t have the charms of Charleston or Greenville, and its crime rate is among the highest in the nation—about 65 per 1,000 residents. Still, it’s home to several colleges and universities, including the University of South Carolina. And since it’s inland, buyers get more house for their dollar.
Trend 2: Buyers are seeking bargains, without traveling too far
New apartments in downtown Tucson, AZ
The West Coast has seen the steepest home prices in recent years, and that’s why people are looking to leave its priciest metros—without leaving the West altogether.
“Regionally, people generally aren’t looking to go very far, and since we’ve seen prices rise the most out West, [the quest for] affordability seems to be having the strongest effect in other Western markets,” Hale says.
With a picturesque location amid the mountains and a burgeoning tech economy, Boise, ID (No. 2), is especially attractive to those coming from Los Angeles, Salt Lake City, and Sacramento, CA. Although the median listed home in the Boise area is 18% more expensive than the national median, these buyers are looking at Boise homes that are 20.3% less expensive than the median in their hometowns.
“We’re just big enough to have the culture and the job opportunities without the prices and the lines,” says Rob Inman, a real estate agent with Boise Best Real Estate.
(This three-bedroom home measuring 1,985 square feet for $374,900 shows how far a dollar goes in Boise.)
And like all of the top 10 metros on this list, Boise has a lower unemployment rate than the national median—2.7%, compared with 3.6% nationally for the second quarter of 2019. Plus, Idahoans pay less state tax, a total of only 7.9%, compared with a median of about 8.4% for all of the states.
Tucson, AZ (No. 9), like Phoenix, is a popular Sun Belt destination that offers good value: Its median home price is 6% below the national median. But out-of-state buyers, who chiefly hail from Los Angeles, Chicago, and Denver, are checking out homes that are 27% less expensive than in their own hometowns. They’re also probably checking out the area’s stunning landscapes framed by mountains, which inspire residents to throw themselves into biking, hiking, and rock climbing. (This $275,000 three-bedroom home is just minutes from Saguaro National Park.)
“You can live very well here,” says Drew Sanderford, a real estate and planning professor at the University of Arizona, in Tucson. “You can buy a lot of house and enjoy a good quality of life without having to earn an ultrahigh income.”
In Las Vegas (No. 10), the bargain prices perceived by outsiders may be turning off locals.
“Prices are driven up by the out-of-state interest,” says realtor.com’s Hale. “That makes it more difficult for people inside Vegas. While the area is still relatively affordable if you’re coming from California or New York, for local residents it’s becoming less affordable.”
And indeed, those nonlocal house hunters are primarily from Los Angeles, New York City, and Riverside, CA, so they’ll also appreciate Nevada’s lack of state income tax. They’re checking out houses with a median price that’s 27% cheaper than in their home markets—like this sweet three-bedroom for $339,900.
Stephen Miller, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas, points out that Vegas real estate is a fairly safe bet these days.
“People are retiring in California, taking out the equity and buying a house in Las Vegas, and banking the surplus,” he says.
Houses on Lake Sahara in The Lakes district of Las Vegas, NV
Trend 3: Where gigs go, home buyers follow
It’s one of the core laws of real estate physics: Tons of new jobs equals megagrowth in home sales. And nothing epitomizes this trend better in 2019 than Charleston. While it’s not the most affordable place on our list (its median listing price is 36% above the national median), a flurry of new jobs has Charleston attracting record numbers of transplants, many from the Midwest.
Randy Bazemore, a real estate broker at Century 21 Properties Plus in Charleston, says most of his clients come from out of state.
“I can’t even describe all the growth here,” he says. In fact, Charleston’s population is expected to grow 8.1% from 2019 to 2024, while unemployment sits at a paltry 2.9%.
Boeing opened a new campus in North Charleston in 2011, and 2018 saw a $1.1 billion Volvo plant opening less than an hour away, in Ridgeville.
Most people looking at Charleston real estate listings in the second quarter of 2019 were from out of state (almost 60%). Among those out-of-staters, the largest share came from Charlotte, NC, followed by Atlanta and New York City.
Transplants with young kids prefer suburbs such as Mount Pleasant, Sullivan’s Island, and the Isle of Palms, which have good schools and are still near the water. Here, you’d expect to find a move-in ready, three-bedroom house like this one for $600,000 or more—much more.
It’s a similar story upstate in Greenville, where “employment is really the main driver” of population growth, says Jerome McKibben, a demographer at McKibben Demographic Research, in Rock Hill, SC.
The city has attracted many new employers in the past few decades, and its automotive and manufacturing industries remain strong. The BMW plant in nearby Greer, SC, counts 9,000 employees, and expects to push past 10,000 in the near future.
Trend 4: The future of retirement is still Florida
Cape Coral, FL
A coming demographic wave means that the popularity of Cape Coral (No. 5) and North Port (No. 7), just 45 miles apart on Florida’s northwest coast, is just beginning.
Home shoppers for these two Florida cities, who are primarily located in Chicago, New York City, and Atlanta, are not expecting to get a bargain—the homes they’re checking out are a little over 3% more expensive than in their hometowns. (This three-bedroom home for $279,900 is right in their sweet spot.)
“The bulk of that is retirees,” says McKibben, the demographer. “The peak of the baby boomers are turning 65 in 2021.”
Both metros have high proportions of residents aged 65 and older: 28.7% for Cape Coral, 32.3% for North Port.
But there is growing opportunity for a younger workforce, McKibben says—in the service industry catering to those retirees’ needs.
Hardy Northeasterners who don’t mind the cold winters eye the historic port town of Portland, ME (No. 6), as a retirement location, summer vacation spot, or both.
“It’s a popular destination for people from all over the country,” says Kirk Goodhue, a local real estate broker at Port Island Realty.
The visitors flock to the Old Port waterfront, with its warehouses converted to house restaurants and shops, and to the picturesque lighthouses dotting the area. Out-of-state home shoppers, who hail primarily from Boston, New York City, and Worcester, MA, prefer to live by the water, although of course that costs more. Still, they’re looking at spending about 15% less than in their hometowns, a median of about $346,000.
Trend 5: The great Hawaiian mystery
The presence of Honolulu (No. 3) in this ranking remains a bit of a mystery—not why people from the mainland would be attracted to an island paradise, of course, but just what their intentions are. Of the folks who click on Honolulu listings, 56% are from out of state—primarily pricey Los Angeles, San Francisco, and New York City. And yet the homes that they’re checking out are101% more expensive than the median listing in their hometowns. Second homes make up only 3.3% of metro Honolulu’s real estate, and there aren’t that many investment properties, either.
Could people be just wishful clicking?
“In order to buy in Hawaii, you have to be rich,” says George Krischke, a real estate broker with Hawaii Living in Honolulu. Yes, indeed.
But most buyers shouldn’t expect to be wandering through lush fields of tropical flowers on their own property.
“We have limited land, so we have more condos available for sale than single-family homes,” Krischke says.
The would-be transplants are checking out homes costing around $727,000, which is just about right for a sweet little condo with a stunning view of the beach.
The post Magnetic Metros: The Top 10 Places Luring Out-of-Towners to Move In appeared first on Real Estate News & Insights | realtor.com®.
Source: Housing Trends Feed