While some cities battle with an exodus of residents amid rising living costs – including high taxes – it appears prospective homebuyers have begun to seek out new areas where living costs are more affordable.
According to a new report by real estate brokerage firm Redfin, four of the real estate markets seeing the largest growth in home sales and searches from out-of-town buyers also have low building costs. All four are located in states with either low – or no – state income taxes, from Washington to North Carolina and Florida.
The search for affordability has presented itself in other recent trends in the housing market.
As previously reported by FOX Business, the metro areas that saw the biggest price gains in January were many of the most affordable in the country, thanks to increased competition for properties.
The median home-sale price for the month, across the entire country, was $306,400.
As previously reported by FOX Business, inventory was expected to remain tight throughout 2020. In fact, according to a forecast from Realtor.com, the total number of available homes for sale could even hit a record low – particularly in the first-time buyer’s market.
Competition in the entry-level market was expected to lift prices.
But here’s a look at the four affordable cities attracting the most out-of-town homebuyers, according to Redfin, which are primed for growth over the next decade.
New home sales in Spokane increased 37 percent in the fourth quarter of 2019 when compared with the same period a year prior.
According to Redfin, Spokane is currently the most competitive housing market in the country – with nearly three-quarters of home searches coming from out-of-town buyers.
The good news is that homebuilding in the city is relatively inexpensive, since land is cheap.
The median price of an existing home is $255,000, or $350,000 for a new home.
Las Vegas, Nevada
In Las Vegas, nearly half of all homebuyer interest is coming from people who live outside the metro area. Many Californians – particularly those who live in Los Angeles – show interest in potentially snapping up a home in Sin City.
Home sales, meanwhile, are growing at a rate of nearly 16 percent.
The median home price of an existing home is $285,000, while a new home carries a median price of $388,000.
Charlotte, North Carolina
Home sales in Charlotte are growing at an annual pace of 14.5 percent. About 40 percent of searches are coming from people who do not already live in the city.
Household income in the metro grew at a rate of 5 percent in 2019.
Like Spokane, homebuilding is relatively inexpensive, which means the metro is equipped to handle a bump in population numbers.
The median price of an existing home is $248,000, while the median price of a new home is $325,000.
Florida is a popular destination for people looking to flee high-tax states in the northeast – like New York and New Jersey – since it has no statewide income tax.
According to Redfin, Orlando is emerging as a popular destination for out-of-town buyers.
Sales of new homes rose 21 percent in the fourth quarter of 2019, year over year, while incomes are growing at a rate of 5.4 percent.
More than half of all searches for homes in Orlando originated from outside the city.
The median sale price of an existing home is $250,000, while a new home costs about $316,000.