- The American Southwest exploded during the pandemic as masses of Americans settled in the region.
- The influx pushed up house prices. While this hurt potential buyers, it benefited others.
- Here are the three groups that have made the most of the Southwestern housing market during COVID.
The desire to live in the hottest corner of the country has exploded over the past year. Masses of Americans fleeing cooler cities and climates flocked to Texas, Arizona, Nevada, New Mexico and Utah, breathing even more life into the country’s fastest growing region. fast.
While the influx of new residents poses challenges – house prices have skyrocketed across the country throughout 2021 – few areas have seen values soar as much as the Southwest.
In the process, a small group of Americans have established themselves in the pandemic-era market.
Some of the biggest winners of the pandemic-era movements were those who didn’t budge at all. Residents of towns and southwestern suburbs now have “outstanding net worth” in their homes, Ali Wolf, chief economist at real estate data firm Zonda, told Insider.
“There is a huge gap between locals and newcomers,” Wolf added. “The outside of town comes in and doesn’t really balk at the prices. But a local will look at the prices and say, ‘Oh my gosh, it’s so much more expensive. “”
This division has helped some residents capitalize on the boom. Cristian Mendoza, 25, moved from Baytown, Texas to El Rancho, New Mexico – a town about an hour from Santa Fe – after getting a better job. And while he has kept his home in Texas, he has seen property prices in the Houston area “rise quite significantly over the past two years.”
For now, Mendoza is watching his Texas property appreciate, and he’s biding his time to have fun in New Mexico.
“I don’t see myself buying a house here anytime soon, just because of the prices. I will probably rent for a few years unless I find something cheaper a bit outside of town,” he said. declared.
2. Retirees and coastal movers
Americans arriving in the Southwest from expensive coastal hubs like New York, San Francisco and Los Angeles may pay extra in local terms, but they get a discount from the cities they have left.
David Church, 48, already owned a home in Henderson, Nevada, before COVID hit. The newly built house was supposed to be an investment property, but the Church family moved in once they realized it brought many benefits that Southern California had to offer, but at a much lower price. .
Their home in Oak Park, Calif. Sold in four days and they have been living in Nevada since July. Having a home ready to move in has helped churches reap the rewards of soaring house prices in California without getting trapped as a buyer in a sellers’ market.
“We were able to take advantage of our house without needing to find a place to buy. It helped us a lot,” Church said, adding that he was still looking to buy another house near Phoenix. “As inflation moves, if you don’t buy you will be left behind.”
Retirees have also benefited from the evolving trends of the pandemic. COVID
has resulted in millions of retirements, and several towns in the southwest were already teeming with retirement communities.
“If they live in an area where it is expensive to move, they can leverage their equity, relocate to this community over 55 and have instant connection with their neighbors as this is an age targeted area. “Zonda’s Wolf said.
3. Well-off millennials
Many movers in the pandemic era are millennials looking to find their first home. But where those who move from one home to another can leverage the equity in their current property, first-time buyers don’t have the same advantage. And as Millennials are in their peak buying years, the demand for affordable housing is skyrocketing.
Middle- and upper-income millennials will have the easiest time in the bustling market, Wolf said. They can afford homes and condos in increasingly expensive cities, and although the market is on the verge of cooling, prices are unlikely to drop in more popular urban centers, he said. -she adds.
“There will be a class of millennials who absolutely thrive in today’s environment,” Wolf said. “They have enough money or enough support from their families to make it work, and they don’t have to compromise the location for affordability.”