Jacksonville, Austin and Charlotte Led 13% Surge In Total U.S. Housing Market Value During Pandemic
The housing market has gained $4 trillion in value in the past year as cash-rich Americans have transferred their wealth from major hubs like San Francisco and New York to relatively affordable cities with more space and sunshine
SEATTLE, March 11, 2021 /PRNewswire/ -- (NASDAQ: RDFN) — The total value of homes in the U.S. has surged 13.4% ($4 trillion) during the coronavirus pandemic, to $33.4 trillion in February 2021 from $29.4 trillion in February 2020, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage. The increase was driven by Jacksonville, FL, Austin, TX, Charlotte, NC, Phoenix and Sacramento, CA—relatively affordable, sunny destinations that have attracted an influx of wealthy homebuyers from dense, coastal cities.
One reason prices have jumped is that so many people have been able to relocate thanks to remote work. Affluent Americans and major corporations have left San Francisco and New York for less expensive locales like Austin and Charlotte, and they took their wallets with them. As a result, home values in these places have seen an especially sharp increase. This has benefited families that already own homes but pushed homeownership further out of reach for many Americans, exacerbating wealth inequality in the U.S.
Affordable Migration Hotspots See Biggest Market-Value Gains In Percentage Terms
The total value of homes in Jacksonville jumped 21.1% year over year to $165.9 billion in February 2021—the largest gain in percentage terms among the 50 most populous U.S. metropolitan areas. It was followed by Austin (+17.9%), Charlotte (+17.3%), Phoenix (+16.1%) and Sacramento (+14.8%). Rounding out the top 10 were Detroit, Milwaukee, Riverside, CA, Providence, RI and West Palm Beach, FL, all of which experienced market-value increases of more than 12%.
Four of the top 10 metros—Jacksonville, Charlotte, Detroit and Milwaukee—had a median home price below the national level ($342,326) in January, the most recent month for which sale price data is available.
"A lot of cash buyers are coming to Jacksonville from big cities like L.A. to take advantage of lower taxes, and they're offering sellers well over their asking prices. They're discovering that they can afford a nice beach house here, when before they could only buy a modest condo," said local Redfin real estate agent Heather Kruayai. "Locals are getting outbid because they can't compete with the out-of-state money and there just aren't enough homes on the market."
Kruayai continued: "Sellers are determined to get top-dollar because they know how hot the market is. When they see that a home similar to theirs sold for $480,000, they'll want to list theirs for $520,000. They're confident that surging demand will continue to drive up prices."
Three of the top 10 metros—Austin, Phoenix and Sacramento—have consistently made Redfin's ranking of the most popular migration destinations during the pandemic. Austin had a bigger net inflow of residents than any other major metro in January, meaning more people looked to move in than leave. Nearly 45% of Redfin.com home searches in Austin came from users in other metro areas in January, up from 32.6% a year earlier.
A recent Redfin analysis found that out-of-towners moving into a handful of the country's top migration destinations had larger homebuying budgets than locals. The average housing budget for out-of-towners relocating to Austin in 2020 was $852,276, 32.2% higher than the $644,771 average budget for local buyers.
"This is the busiest market I've seen in 15 years," said Austin Redfin agent Andrew Vallejo. "Three-quarters of my clients are coming from the Bay Area, and many of them work for major companies like Google, Facebook, Oracle, Amazon or Tesla, which have all built offices here or are in the process of doing so. "With so much equity in the financial markets, these buyers have a ton of buying power. Sellers and builders are raising prices because they see that these buyers are willing to pay up."
While the jump in U.S. housing values has made homeownership more challenging for many Americans, it correlates with an increase in new businesses across the country. In Texas, for example, business formation was up 66% year over year in January (outpacing national growth of 58%) as many entrepreneurs used their home equity as a source of collateral to secure financing for their businesses.
Summary of Top 10 Metros With Largest Increases In Housing-Market Value All data represents February, unless otherwise noted.
Year-Over-Year Change In Total Value of Homes (%)
Total Value of Homes (Billions of $)
Year-Over-Year Change In Total Value of Homes (Billions of $)
Median Sale Price (January 2021)
Year-Over-Year Change in Median Sale Price (%) (January 2021)
About Redfin Redfin (www.redfin.com) is a technology-powered residential real estate company, redefining real estate in the consumer's favor in a commission-driven industry. We do this by integrating every step of the home buying and selling process and pairing our own agents with our own technology, creating a service that is faster, better and costs less. We offer brokerage, iBuying, mortgage, and title services, and we also run the country's #1 nationwide brokerage website, offering a host of online tools to consumers, including the Redfin Estimate. We represent people buying and selling homes in over 95 markets in the United States and Canada. Since our launch in 2006, we have saved our customers nearly $1 billion and we've helped them buy or sell more than 310,000 homes worth more than $152 billion.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email [email protected]. To view Redfin's press center, click here.