Affordable inland real estate markets are heating up as prospective buyers turn away from expensive coastal markets, according to data from Redfin.
HousingWire previously reported that Redfin’s migration analysis revealed in the third quarter of 2018 people continued to relocate from costly coastal markets to more affordable cities.
Now, Redfin’s data shows metro areas like Atlanta and Akron, Ohio are shrinking in supply, and expediting the contract process. Notably, more of these homes are selling above-list price compared to the prior year.
In Atlanta, when compared to last year home inventory has fallen 19.7% and 21.1% of homes sold above list price. Homes inventory in Akron also fell, retreating 12.5% from 2017, however 22.4% of homes sold above their asking price.
However, it’s worth noting in September, Redfin indicated, homes that sold above asking price dipped below 2016 levels. During this time, around 23% of homes sold for more than asking price, declining from nearly 26% of homes the same time in 2017. Furthermore, the share of homes that sold above asking price continued to steadily fall from 29% in June.
That being said, Redfin’s latest data suggests that inland metros area are now leading the charge. Redfin largely attributes this to the fact that a majority of these homes fall below the national median price of about $300,000 and host populations under 2 million people.
According to Redfin’s data, these are the top metros heating up:
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Redfin Agent Claryssa McEnany said that competition in Wilmington has become fierce and often buyers have to offer over asking and compete against three to six other offers.
“I’m working with several buyers moving to the area from New Jersey who have expressed that they want to escape the higher property taxes that they can no longer fully deduct,” McEnany continued.
McEnany said that although buyers are motivated to move, there just aren’t enough homes available.
The National Association of Home Builders/Wells Fargo Housing Opportunity Index revealed that in the third quarter of 2018, housing affordability remained at a 10-year low.
"Continuing home price appreciation and rising interest rates coupled with persistent labor shortages are contributing to housing affordability concerns," NAHB Chairman Randy Noel said. "Builders are increasingly focusing on managing home construction costs so that they do not outpace wage gains."
As for homebuyers, Redfin states that even if the real estate slowdown becomes more widespread, it’s likely that inexpensive markets will strengthen thanks to their affordability.
NOTE: To determine which markets are still experiencing growth in sales, Redfin ranked the top 25 metro area with population of at least 500,000, based on data for the four weeks ending October 14. It then compared the data to the same period in 2017.