The real estate market has made it very challenging for many Americans to achieve their dream of homeownership. Indeed, a high cost of housing, soaring rates and low inventory have left many homebuyers on the sidelines in recent months.
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California and New York for instance — where the high cost of living, especially for housing — present a persistent challenge. These two states lost around 31,000 and 27,000 wealthy millennials, respectively, according to an Upgraded Points survey.
Yet, some states — such as Florida and three more East Coast states — are attracting more first-time homebuyers thanks to specific attributes and affordability, according to a Placer.ai report.
“Affordability is a key for all the states that attract first time homebuyers. Housing prices in Tampa and West Palm Beach are relatively affordable compared to other coastal areas. It’s a good choice for retirees, remote workers and tourists,” said Dottie Herman, vice chair and former CEO of Douglas Elliman Real Estate, adding that, for instance, Florida also has business-friendly tax policies and a warm climate that adds to its desirability.
Since the pandemic, work-from-home has facilitated migration choices driven by two factors: lifestyle and housing costs — at least according to Jason Sorens, senior research faculty at the American Institute for Economic Research.
“More affordable places with higher quality of life have been attracting new residents, often from major metro areas that offer high wages to skilled workers but suffer from high crime, high taxes, or expensive housing,” he said, adding that economic changes associated with technological change and the global marketplace have also driven migration.
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Florida
Florida has several advantages, including its warm climate and endless beaches. Between August 2019 and August 2023, domestic migration boosted the Sunshine State’s population by 2.6% of its August 2023 headcount, according to Placer.ai.
Beyond Tampa, Jacksonville and Orlando, some mid-size cities are also attracting newcomers. For instance, the North Port-Sarasota-Bradenton metro area is one of the fastest growing mid-sized markets, according to Your Observer.
David Druey, Centennial Bank Florida regional president, said that first-time homebuyers are increasingly drawn to Florida due to a compelling blend of economic advantages and enticing incentives.
“It’s the land of milk and honey. The state’s appeal lies in its robust provisions, including attractive tax incentives for businesses and the absence of income tax. Stable housing prices over the last three years indicate a promising window for newcomers in 2024,” he added.
Druey noted that while individuals relocating from the Midwest might initially face sticker shock in terms of housing costs, Florida counters this with opportunities.
“Tailored bank incentives such as the Dream program, aiding those with financial challenges, the FHA First-Time Homebuyers program requiring less upfront investment, and USDA loans, provide diverse pathways to homeownership,” he said, adding that Florida’s mix of economic benefits and targeted programs make it an attractive destination for first-time homebuyers.
The average North Port home value is $352,247, compared to the average United States home value, which is $346,048 — up 2.2% in the past year, according to Zillow.
Maine
As Placer.ai noted, the state is known for its low crime rates and robust job market and has emerged in recent years as a top destination for domestic relocators seeking greener pastures.
Indeed, between August 2019 and August 2023, Maine experienced positive domestic net migration — more Americans relocated to the state than moved away from it. Younger generations are particularly attracted to the Portland-South Portland metro area, according to Placer.ai.
Danielle Hale, chief economist with Realtor.com, said that Portland-South Portland has become a refuge for big-city East Coasters looking for more affordability. Along with affordability, it’s important these relocators still have access to the high-quality food and culture they’ve become accustomed to.
“In particular, the Portland metro area attracted half of its home shoppers from New York City and Boston in the most recent data according to Realtor.com,” she said. “With median home prices slightly or well below other Northeastern markets, affordability is a driver.”
Hale added that the median home listing price in November in Portland was just shy of $600,000 according to Realtor.com data, while all other metros in Maine saw prices under $400,000. By comparison, the wider New York City metro area had a median home price of $728,000 — and Boston had a median home price of nearly $825,000.
South Carolina
This is another East Coast state that has gained traction, as it has a net positive migration equal to 4.3% of its August 2023 population, according to Placer.ai.
Realtor.com’s Hale noted that in South Carolina, out-of-staters are also driving shopping interest as the warm weather, tax friendly climate and affordable homes with ready beach access spur some markets.
“According to data on shopping patterns from Realtor.com, two-thirds or more of recent online home shoppers in Columbia, Charleston, Myrtle Beach, and Hilton Head came from out of state,” she said. “While beach-front living does come at a premium relative to other in-state housing markets in Charleston ($519,000) and Georgetown ($509,000), Myrtle Beach’s market offers ocean access at a below US median listing price point of $350,000 according to Realtor.com data.”
North Carolina
In addition to a pleasant climate, the state boasts an affordable cost of living.
Raleigh was recently named a top city for first-time homebuyers, and is particularly attractive to millennial movers looking to settle down, according to Placer.ai.
Another city — Cary — also ranks high among millennial newcomers.
The Raleigh-Cary metro is particularly good fit for young families, with favorable housing prospects, a thriving job market and good public schools, noted Placer.ai.
In North Carolina, out-of-state home shoppers in major markets such as Charlotte, Greensboro, Raleigh-Cary and Durham-Chapel Hill make up roughly half of recent online shoppers, per Hale.
“Major vacation destinations, however, like beachy Wilmington or mountainous Asheville, have even higher shares of out-of-state home shoppers,” she added.
Home prices in vacation spots are higher than the U.S. median with a November listing price of $500,000 in Wilmington and $575,000 in Asheville, but larger urban areas with a wealth of job opportunities are priced more competitively. Charlotte ($415,000) came in just below the U.S. median ($420,000) and Raleigh-Cary ($452,000) and Durham-Chapel Hill ($490,000) came in just above it, she added.
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This article originally appeared on GOBankingRates.com: Florida and 3 More East Coast States Are Attracting First-Time Homebuyers — Here’s Why
