Out-of-town home buyers pay $17k more than locals

Add hometown discounts to the growing number of challenges home buyers face.

Consumers moving from one place to another pay an average of $17,123 more than local property purchasers, according to a study of the top 11 migratory housing markets between July 1, 2020 and June 30, 2021 by Redfin.

By dollar amount, the widest discrepancies came in Sacramento, Calif., with out-of-towners paying $67,500 more, $50,450 more in Dallas and an additional $47,500 in Miami. Out-of-towners actually paid $16,500 less in Las Vegas, $13,000 less in Tampa, Fla., and $9,000 less in Cape Coral, Fla.

When broken down by the percentage paid over asking Austin, Texas led the group, with migrant workers paying 7.8% more than list price — $470,000 versus $439,900 — and locals paying only 3.7% more than sticker price — $447,500 and $425,000. Sacramento migrants came next at 3% — paying an average of $627,500 for a $615,950 listing — then 2.5% for Dallas migrants — paying $438,450 for a home listed for $425,000.

The differences can be partially explained by newcomers buying at higher price points in those cities than the borrowers remaining in their metro areas, Austin Redfin agent Andrew Vallejo said.

“People moving into Austin tend to come with a lot of cash from selling homes in expensive West Coast cities — especially the Bay Area — and those who can work remotely often come with high West Coast salaries, too,” Vallejo said in the report. “They typically have a lot more buying power than locals, and they can afford to search for and ultimately buy bigger, pricier homes.”

When competition got hot and the number of bidding wars increased, migratory borrowers had the biggest advantages in Cape Coral, Las Vegas and Atlanta with offer win rates of 56%, 49% and 48%, respectively. The highest win rates for local buyers came in Cape Coral as well at 62%, Tampa at 53% and Atlanta at 46%.