The typical Phoenix home price rose by the cost of a Porsche, and Boston prices rose by the cost of a Honda minivan, per a Redfin analysis
Today’s homebuyer could purchase the typical Austin home for $485,000—but if it was possible to go back in time one year, they could buy a home and two Teslas for the same price, according to a new report from Redfin,the technology-powered real estate brokerage.
Put another way, someone could purchase both a Tesla Model Y for about $41,000 and a Model S for $71,000 for less than the $116,000 increase in the median-priced Austin home over the last year. The typical Austin home cost roughly $369,000 in January 2021. Redfin compared home-price increases from January 2021 to January 2022 in select U.S. metros with the approximate MSRP of various new vehicles.
In Phoenix, the price of the typical home increased by $98,750 last year. With the difference, a buyer could purchase a Porsche Panamera for $90,000 and still have money left over. Home prices grew more in Austin than all but two other major U.S. metros in 2021 (San Jose, CA and San Diego). Next came Salt Lake City and Los Angeles, followed by Phoenix.
The huge annual price increases are a result of last year’s red-hot housing market. Homebuyers, motivated to move by record-low mortgage rates and remote work, bid against each other for the limited supply of homes for sale. Bidding wars reached a record high in January, with 70% of Redfin offers facing competition, leading to a big portion of homes being sold over asking price.
In Austin and Phoenix in particular, another reason for skyrocketing prices is the flood of Americans moving in from other parts of the country, especially expensive tech hubs like the Bay Area and Seattle. Thanks to the pandemic-fueled rise in remote work, the number of Redfin.com users looking to move into both Austin and Phoenix from out of town roughly doubled from 2019 to 2021. Those migrants are a big contributor to rising home prices, as their homebuying budgets are significantly bigger.
“Homes that were selling for $350,000 before the pandemic are going for closer to $500,000,” said Austin Redfin agent Crystal Lopez. “My advice to buyers: If you see what seems like a reasonable price, buy it. The value will likely go up. If people wish they would have bought in Austin a year ago, next year they’re going to be wishing they would have bought now.”
Corvettes in Texas and minivans in Massachusetts
Redfin also compared home-price increases to car prices in other select metro areas:
- Raleigh, NC: The cost of the typical home increased by $87,500 last year to $400,000. The increase is roughly the cost of a Lexus LX SUV ($88,245).
- Dallas, TX: The cost of the typical home increased by $65,000 to $380,000. That price increase could buy a Chevy Corvette for $62,195.
- Boston, MA: The cost of the typical home increased by $38,000 to $595,000. The increase is enough to buy a Honda Odyssey for $34,265, with thousands left over to buy top-of-the-line car seats for the new minivan.
- Buffalo, NY: The cost of the typical home increased by $25,000 to $200,000. The increase could almost buy a Nissan Rogue SUV for $28,075.
- Oklahoma City, OK: The cost of the typical home increased by $17,750 to $224,000. The increase is big enough to buy a Kia Rio for $17,275.
- Detroit, MI: The cost of the typical home increased by $8,300 to $163,000. Motor City’s price increase is big enough to buy a Honda XR650L motorcycle for $7,000.
To read the full report, including methodology and a table showing home-price increases for several U.S. metro areas, please visit: https://www.redfin.com/news/2021-home-price-increases-compared-with-cars