U.S. home value rose 13.4 percent since the start of the pandemic, from $29.4 trillion in February to $33.4 trillion in February 2021, according to a report from Redfin.
The increase was driven in part by homeowners and corporations being able to relocate from dense coastal cities due to remote work caused by the coronavirus restrictions. Cities including Jacksonville, Fla., Austin, Texas, and Charlotte, N.C., saw especially sharp increases in home values, as they offer more affordable locations with space and sunshine.
Redfin reported home value in Jacksonville rose 21 percent year-over-year, the largest jump among the 50 most populous U.S. metropolitan areas. Other cities topping the list include Austin (18 percent), Charlotte (17 percent), Phoenix, Ariz., (16 percent) and Sacramento, Calif., (15 percent.)
“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,” Redfin Real Estate Agent Heather Kruayai said. “They’re discovering that they can afford a nice beach house here, when before they could only buy a modest condo.”
A Redfin analysis reported out-of-towners moving into some of the top relocation destinations have larger homebuying budgets than locals. The average housing budget for those relocating to Austin in 2020 was $852,276, 32 percent higher than the average budget for local buyers.
“Sellers are determined to get top-dollar because they know how hot the market is,” Kruayai said. “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.”