Out-of-town homebuyers are driving up real-estate prices in these 10 overvalued cities, and it’s fueling housing-bubble fears

George Glover 
Feb 17, 2022, 10:10 AM Article from BusinessInsider.com
  • Redfin surveyed 49 cities to determine the most competitive housing markets in the US.
  • Out-of-town buyers could afford almost 30% more than locals in Nashville and New York, Redfin found.
  • Insider breaks down why skyrocketing housing prices are driving bubble fears.

The real-estate brokerage listed the southern-migration hot spots Atlanta, Miami, and Nashville as some of the US’s most competitive housing markets, alongside New York and Philadelphia.

To determine the hottest real-estate markets, Redfin analyzed its users’ average maximum list-price filters. It found that out-of-towners had more to spend than locals in 42 of the 49 cities surveyed, and it cited the rise of working from home as one reason for the gap.

“Many American home buyers were able to widen their searches in 2021 as many employers made remote-work options permanent,” Redfin’s data journalist Dana Anderson wrote in the report. “Remote workers are now able to move somewhere more affordable than their hometown, so it stands to reason that out-of-towners frequently have bigger budgets than locals.”

Housing bubble

There could be a significant overlap between the surge in out-of-town buyers and the rising number of real-estate investors buying US homes. A separate Redfin report found that investors bought a record 18.4% of homes sold over the last quarter, up from 12.6% a year ago.