Cash-strapped out-of-town buyers backed by coastal salaries and equity wealth are flocking to Philadelphia to purchase affordable homes, and locals can’t compete. The average homebuyer moving to Philadelphia in the first half of 2022 had a whopping $588,000 to spend on a home, 39% higher than the $422,000 average budget for local buyers, Redfin reports.
As a result, local buyers have been priced out and driven to more affordable suburbs, but as the market cools and competition slows, many are hoping to put up a fair fight for homes in their native metro.
The typical Philadelphia home sold for just $300,000 in June, less than half of New York’s $705,000 median sale price. Prices in Philadelphia have also grown slower: They’re up 20% from the beginning of the pandemic, compared with a 26% jump in New York and a 38% nationwide bump.
“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. “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. Someone moving from Los Angeles to Philadelphia may have a higher monthly housing payment than they would have six months ago, but it’s still much lower than it would be in coastal California.”