Buyers are exploring more options to find additional money in their budget due to intensifying cost pressures which is resulting in increased interest in buyers relocating to a different area.
New research from Realtor.com indicates that during the first quarter of 2022, 40.5% of prospective buyers viewed home listings located outside of their current state, compared to 36.4% in 2021 and 33.4% in 2020.
Those that looked to move to another metropolitan area, including to within their own state was even higher: in the first quarter of 2022, 59.7% of all Realtor.com listing page views came from shoppers searching for home outside of the metropolitan area where they live. This number is up and additional 4.6% this year.
So where were the most popular places homeseekers searched for? In order, they are:
- El Paso, Texas
- Albuquerque, New Mexico
- Washington, D.C.
- Birmingham, Alabama
- Hartford, Connecticut
- Omaha, Nebraska
- McAllen, Texas
- New York, New York
- Augusta, Georgia
- Greensboro, North Carolina
"After two years of pandemic remote work, offices have started to reopen, but instead of seeing a slowdown in the number of people interested in homes out of state, we're seeing an acceleration," said Realtor.com Chief Economist Danielle Hale. "Taking a closer look at the top destinations, we see some very different trends driving the desire to live out of state and home shoppers' diverse needs. First, affordability remains a key focus for buyers, with demand for less expensive areas surging in recent months as climbing inflation and mortgage rates compound cost pressures faced by buyers. Next, flexibility enabled by broader adoption of remote work has fueled interest in sunnier climates, such as the Sun Belt. And finally, some people are simply ready to get back to normal, with some buyers' desire to live downtown lifestyles driving two big cities into the top 10."
While people are expected to have a better chance to buy a home in 2022 due to increasing supply, “rapidly intensifying cost pressures” are creating a greater sense of urgency for many buyers to find a home amid increasing inflation and interest rates.
“And January-March search trends suggest many prospective buyers are doing just that. In eight of the top 10 relocation destinations, listing prices per square foot were lower than the national average ($206),” Realtor.com said. “Additionally, although rising demand is fueling double-digit annual growth in the per square foot price in the majority (9) of these markets, half posted lower gains than the 2022 Q1 national rate (+15.7%).”
“For instance, the No. 7 market of McAllen, Texas offered the most affordable home price per square foot among the top 10, at a median of $125,” Realtor.com continued. “While that represented an increase of 13.8% year-over-year, McAllen's median listing price per square foot was still lower than in its top source of out-of-state buyer demand: Washington, D.C. ($277).”
Click here to view the report in its entirety.