Remote work has had a huge impact on the housing market. This is especially true for destinations that have attracted wealthy foreigners moving during the pandemic.
Hotspots like Boise, Idaho and Austin, Texas have seen house prices soar thanks in part to the influx of high-wage remote workers, according to new analysis from real estate brokerage Redfin. Between 2019 and 2021, the median income of homebuyers in Boise rose 24% (to $98,000), while home prices soared 53%. At the same time, the median income of Austin homebuyers rose 19% (to $137,000) and the median home price rose 48%.
In a press release, Redfin’s chief economist, Sheharyar Bokhari, said remote working allows higher-paid white-collar workers to move to cheaper and more attractive cities and save money. But for people in those places, remote work can have “the opposite effect,” Bokhari said, “as house prices skyrocket while their income stays virtually the same.”
As foreigners flocked from expensive coastal towns to more affordable destinations in the Sun Belt and the West, they exacerbated existing housing shortages and increased competition, making it harder for locals to buy. A February report from Redfin found that the budget gap between foreigners and locals was approaching 30% in some of the most popular cities for transplants.
Home prices are rising in 10 cities where incomes have skyrocketed
Here are the top 10 cities where homebuyer income grew the most between 2019 and 2021, according to Redfin, along with the corresponding increase in median home prices over the same period.
- Boise, Idaho: 53%
- Austin, TX: 48%
- Cape Coral, Florida: 48%
- North Port, Florida: 47%
- West Palm Beach, Florida: 33%
- Miami, Florida: 38%
- Phoenix, Arizona: 48%
- Stockton, California: 34%
- Tacoma, WA: 39%
- Salt Lake City, Utah: 41%
(Note: Redfin’s data only includes homebuyers who took out a mortgage to buy their new home, not homebuyers who paid cash.)
Real estate market hotspots are cooling
The combination of high mortgage rates and high house prices has caused the scorching housing market to cool in 2022, especially in many cities that have seen the biggest increases over the past two years.
A recent report by Realtor.com named Boise, Austin and Phoenix among the top cities where sellers are cutting prices.
“The price declines are hitting the hardest markets that have seen a hot streak during the pandemic,” Realtor.com senior economist George Ratiu said in the blog post. “These are also markets that have experienced rapid price increases due to inadequate housing supply.”
More money :
This stat alone shows how difficult it is to buy a home in 2022
As the housing market cools, the bidding wars disappear
Homebuyers Are Fleeing These 10 Cities – Here’s Where They Want To Move Now