Texas markets

The main real estate markets attracting foreign buyers

As homebuyers explore ways to increase their chances of success in the face of intensifying cost pressures, new search indicates that interest in relocation is on the rise. In Q1 2022, 40.5% of potential buyers on Realtor.com viewed real estate listings outside of their current state, compared to 36.4% in 2021 and 33.4% in 2020.

Where are they going ? The top 10 destinations in order of ranking were El Paso, Texas; Albuquerque, New Mexico; Washington D.C.; Birmingham, Alabama; Hartford, Connecticut; Omaha, Nebraska; McAllen, TX; New York City; Augusta, Georgia; and Greensboro, North Carolina.

“After two years of pandemic remote working, offices have started to reopen, but instead of seeing a slowdown in the number of people interested in out-of-state homes, we’re seeing an acceleration,” the economist said. CEO of Realtor.com. Danielle Hale.

“As we take a closer look at the top destinations, we see very different trends driving the desire to live out of state and the diverse needs of home buyers,” she explained. “First, affordability remains a key objective for buyers, with demand for cheaper areas increasing in recent months as inflation and mortgage rates add to cost pressures buyers face. Then, the flexibility enabled by wider adoption of remote working has fueled interest in sunnier climates such as the Sun Belt. And finally, some people are just ready to get back to normal, with some buyers’ desire to live downtown pushing two major cities into the top 10.”

With tighter budgets, buyers are expanding search areas in search of affordability

While Americans are should have a better chance of finding accommodation in 2022, rapidly escalating cost pressures are creating a greater sense of urgency for many buyers to find a home within their budget. With inflation rising and mortgage rates hitting an all-time high house prices for sale and the rentshomebuyers in 2022 are highly motivated to explore relatively affordable markets where higher incomes can generate more buying power.

And search trends from January to March suggest that many potential buyers are doing just that. In eight of the top 10 relocation destinations, listing prices per square foot were below the national average ($206). Additionally, while growing demand is fueling double-digit annual price per square foot growth in the majority (nine) of these markets, half saw gains below the national rate in the first quarter of 2022 (+15.7 %).

For example, Market #7 in McAllen, Texas had the most affordable home price per square foot among the top 10, at a median of $125. While this represents a 13.8% year-over-year increase, McAllen’s median listing price per square foot was still lower than its primary source of out-of-state buyer demand. : Washington, D.C. ($277).

With more flexibility, some home buyers are migrating to warmer climates

Cost pressures may be a contributing factor for some out-of-state homebuyers, but others might see relocation as an opportunity to explore living in areas they couldn’t have before the pandemic. of Covid, with that flexibility allowed by trends like the increase in remote work. Research trends from Realtor.com in the first quarter of 2022 suggest that an increasing number of home buyers are potentially heading to regions with warmer climates. In fact, Sun Belt Metros accounted for six of the top 10 relocation destinations, all of which saw larger annual gains in out-of-state viewership share than the national rate, led by El Paso (+11.6 percentage points).

Further illustrating the increased demand for housing markets offering warmer climates, five of these six Sun Belt metros counted northern cities as the top sources of out-of-state demand. For example, Washington, DC and New York were among the top three areas where home buyers searched for homes in market #9 Augusta, Georgia and #10 Greensboro, North Carolina.

As some buyers pursue downtown living, demand from big cities is returning

While some of the top relocation destinations mirror trends that emerged during the pandemic, very different factors could potentially drive demand in others. With offices reopening and daily life resuming in many downtown areas, major metros accounted for two of the top 10 relocation destinations: Washington, DC at #3 and New York at #8. No. 5 spot went to Hartford, Connecticut, which some may consider a commuter town to New York.

Going further back in Realtor.com’s data history, to its Q1 2020 Inter-Market Demand Report, Washington, DC and New York were among the 10 markets where the onset of Covid was most pronounced and home shopping habits showed the impact. However, in all of these metro areas, data for the first quarter of 2022 shows that interest from out-of-state home buyers has not only returned to year-over-year growth, but is at the highest level of all. quarters since the first quarter of 2018.

Hale said: “In addition to the full rebound in outbound demand in New York, Washington, DC and Hartford, the fact that these markets made it into the top 10 destinations in the first quarter of 2022 signals a return to some pre-Covid norms. It simply comes down to stage of life, which housing decisions are often tied to, as major cities have historically seen high inbound demand from young buyers across the country looking to settle. .