Outsiders — mostly from California — fuel Denver's housing market
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People moving to Denver are coming armed with home-buying budgets 12% bigger than what locals have, according to a new Redfin analysis.
Why it matters: That gap puts Denver in the top 10 cities nationwide where the purchasing power of out-of-towners outpaces that of existing residents — a factor that's significantly driving up home prices and critically limiting housing supply.
State of play: Redfin says that most people are coming from states like California, where income taxes are high.
- Other transplants hail from places like New York City and Washington, D.C.
What they're saying: "Even though the housing market has slowed, the share of homebuyers moving to different parts of the country has not," said Redfin deputy chief economist Taylor Marr in the company's analysis.
- "That's partly because home prices and mortgage rates have increased so much that homebuyers with the flexibility to relocate are seeking out affordable areas," Marr added.
By the numbers: The gap between maximum budgets breaks down to an average of $983,761 for transplants, compared to locals shopping with $879,964, the analysis found.
- The median home price in Denver this June was $610,000, compared to $890,000 in Los Angeles.
The big picture: As previously reported, startups are cashing in on Denver's hot market by launching cash-buyer programs aimed at leveling the playing field for everyday house hunters.
The bottom line: For those who want to buy a house in a midsized city, Denver maintains its status as an attractive market, despite being one of the most unaffordable in the U.S.
- But that doesn't always work in favor of locals.
What to watch: Metro Denver was listed 34th of 98 metros most at risk of a housing downturn during a recession, Redfin found.
- The report comes as Denver's real estate market shows early signs of slowing down.