panoramic views & 3 car garage.
Are mortgage rate buy downs a good deal — or a dangerous trap?
BY JUSTIN HERMES, HOST OF REAL
As we roll through summer, the weather isn’t the only unpredictable thing in Colorado Springs. Every week seems to bring a different story to the housing market that remains anything but predictable. Some homes are flying off the shelves in a single day while others are sitting month after month with zero movement. Pricing strategies that used to work no longer do, and buyer behavior is more unpredictable than ever. Many sellers are still in denial that housing prices are going down and the data is a bunch of smoke and mirrors. Seller concessions are not considered in housing sold data and it’s becoming more misleading as rate buy downs averege 4%-7% of a home’s contact price.
In today’s volatile market, one of the biggest questions I’m hearing from clients and listeners is this: Are mortgage rate buy downs a smart move — or a financial trap?
Let’s break it down.
WHAT’S GOING ON IN THE MARKET?
Right now, average days on market in Colorado Springs is around 48. Sellers should be pricing aggressively, as the market continues to soften as we progress further into the year. It’s inconsistent — and that’s because
the entire market is being driven by uncertainty, not just in real estate, but across the economy. This volatility has sellers and buyers confused and feeling the pressure to perform. One of the biggest developments we have seen over the years is the ability to use a rate buy down to keep a buyer in the market to purchase.
THE HYPE BEHIND MORTGAGE RATE BUY DOWNS
So, what’s the deal with these mortgage buy downs? You’ve probably seen builders advertising incredible rates — 3.5%, 4%, deals that seem too good to be true. In many cases, they are.
The 2-1 Buy Down: This is perhaps the worst of the bunch. It temporarily lowers your mortgage rate for the first two years — say, 4.5% in year one, 5.5% in year two, and then jumps to 6.75% in year three. To achieve this, $10,000 to $15,000 is placed in an escrow account to offset your payment.
But here’s the catch: it’s still your money. That money could’ve been used toward closing costs or saved in your own account where it could at least earn interest. Worse, many buyers are told, “Don’t worry, you’ll refinance before it adjusts.” But if rates don’t drop, you’re stuck with a much higher payment than
you budgeted for.
Temporary Buy Downs and Teaser Rates: Slightly better than the 2-1, these products lower your rate for a few years, but then you’re at the mercy of adjustment terms — many of which aren’t clearly explained. I’ve seen buyers go from 4% to 6.5% within a year. Even worse? Some of these products allow lenders to raise the rate all the way to 18%, depending on the fine print. The talk of date the rate and marry the house has gotten several homemowners into trouble, as they are yet to see that rate relief.
Adjustable-Rate Mortgages
(ARMs): These have long been sold as a way to “start low and refi later.” But with rate volatility, ARMs are a risky gamble. Especially if you plan to keep the home long-term, an ARM can wreck your monthly budget and send your investment underwater.
BUILDERS AND BUY DOWNS: A DANGEROUS COMBO
Many builders are packaging buy downs into inflated home prices. A $500,000 home becomes $575,000 — just to fund a lower rate that “feels affordable” for a few years. But when the honeymoon ends, the payment jumps and the buyer is left holding the bag on an overpriced house with
International buyers purchased $56 billion worth of US homes from April 2024 to March
Foreign buyers purchased $56 billion worth of U.S. existing homes from April 2024 through March 2025, according to the National Association of Realtors’ 2025 International Transactions in U.S. Residential Real Estate report. This is a 33.2% increase from the previous 12-month period. International buyers purchased 78,100 properties, up 44% from the prior year and the first year-over-year increase since 2017. The median purchase price for foreign buyers of $494,400 was a record high.
“International interest in buying U.S. real estate increased following the global economic recovery from several years of pandemic-related disruptions. However, elevated home prices and interest rates continue to dampen overall potential sales activity and remain well below pre-pandemic levels,” said NAR Chief Economist Lawrence Yun. “Boosted by a significant increase in the state’s housing inventory, Florida remained the top destination for foreign homebuyers, extending a streak of at least 15 years. To some degree, due to stubbornly high mortgage rates, a greater share of international homebuyers paid cash – 47% compared to 28% among all buyers – and they were more likely to purchase homes priced in the upper end of the market.
Foreign buyers are drawn to investing in American real estate, in part, by our country’s strong protection of private property rights.”
NAR’s 2025 International Transactions in U.S. Residential Real Estate report surveyed members about transactions with international clients who purchased and sold U.S. residential property from April 2024 through March 2025 — capturing data before new tariffs were announced in April. This report equips real estate professionals with valuable information that helps them serve their clients and get to their next transaction. Foreign buyers who resided in the U.S. as recent immigrants or who were holding visas that allowed them to live in the U.S. purchased 43,700 homes (56% of all foreign purchases), with a total dollar volume of $26.9 billion. Foreign buyers who lived abroad purchased 34,400 homes (44% of all foreign purchases), with a total dollar volume of $29.1 billion.
Existing-home purchases by foreign buyers
• $56 billion: Dollar volume, up 33.2% from $42 billion
• 78,100: Total purchases, up 44% from 54,300.
• $494,400: Median price, a record high, up 4.1% from $475,000.
• 47%: Share who made all-cash purchases.
Top five countries of origin: Percent share of foreign purchases, existing homes purchased, dollar volume
• China: 15%; 11,700; $13.7 billion.
• Canada: 14%; 10,900; $6.2 billion.
• Mexico: 8%; 6,200; $4.4 billion.
• India: 6%; 4,700; $2.2 billion.
• United Kingdom: 4%; 3,100; $2 billion
Top five U.S. destinations: Percentage of all foreign buyers
• Florida: 21%.
• California: 15%.
• Texas: 10%.
• New York: 7%.
• Arizona: 5%
NAR Global fosters international real estate collaboration by maintaining formal relationships with more than 100 organized real estate associations in nearly 80 countries around the world. NAR delivers to its members valuable tools, resources, education and business networking opportunities to help facilitate the growth of international investment in U.S. real estate and spur local economic development in markets across the country.
negative equity.
I’ve seen it too often: two years in, taxes rise to full valuation, insurance costs spike, and mortgage payments jump by $800–$1,000 a month. Now those buyers are unable to sell or rent the home without taking a massive loss. It’s heartbreaking — and entirely avoidable. So next time you see a rate offered in the 3%-4% range know that there is a catch for the consumer.
SO, ARE ANY BUY DOWNS WORTH IT?
Yes — but only in very specific circumstances.
As a real estate investor, permanent buy downs can be a great tool if the property is going to be set into a longterm portfolio. Why? Because if you plan to hold a property for 15 to 20 years and spend $6,000 to buy down the rate then it saves you $150 a month, In this scenario you would break even in just over three years — and everything after that is pure savings.
Key takeaway Permanent buy downs can make sense when:
• You plan to own the home long-term (7+ years).
• You’re investing your own cash (not builder-funded gimmicks).
• You calculate the break-even point and it’s under 5–6 years.
If it takes you more than 7 years to recover the buy down cost, it’s probably not worth it.
FINAL THOUGHTS: THINK LIKE AN INVESTOR, NOT A SHOPPER
Too many people buy homes with the same mindset they use to buy cars: “Can I make the monthly payment?” Instead, ask, “Is this a smart investment?”
You need a guide with an investment mindset — someone who will tell you the hard truth, not just sell you granite countertops and a pretty floor plan. You need to look deep into HOA status, Metro districts, the overall valuation of the community, and especially your taxes and insurance.
Real estate should be a long game. It’s not about timing the market or finding your dream home. It’s about building wealth over 15–20 years through smart, conservative decisions.
If you’re buying a home today, avoid the gimmicks. Stick with fixed-rate loans, buy in established neighborhoods, and focus on cash flow or long-term equity — not short-term affordability illusions. When in doubt, ask yourself: Am I buying a home … or a headache?
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$364,900 •
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$545,000
80831
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$156,069
$356,000
• 8418 Tibbs Road $415,000
• 8123 Henzlee Place
$425,000
• 11458 Moonrock Heights
$430,000
• 11426 Avena Road $445,000
• 13483 Valley Peak Drive
$519,990
• 10950 Scenic Brush Drive
$527,000
• 9804 Bighorn Canyon Drive
$565,000
• 10840 Hidden Ridge Circle
$566,000
• 11537 Allendale Drive
$570,000
• 10085 Exeter Trail $575,000
• 11520 Red Lodge Road
$583,000
• 11325 Allendale Drive
$617,500
• 10643 Ross Lake Drive
$650,000
• 9641 Beryl Drive $686,140
• 10872 White Sands Court
$729,900
• 12900 Sunrise Ridge Drive
$810,327
• 19598 Elliott View $830,000
• 2600 Antelope Hill View
$1,049,000
• 8840 Palomino Ridge View
$1,165,000
80903
• 1430 N. Foote Ave. $227,000
• 812 E. Cache La Poudre St. $645,000
80904
• 3215 W. Pikes Peak Ave.
$476,000
• 1220 Westend Ave. $510,000
• 3172 Virga Loop $845,000
• 1647 Rockview Trail
$1,175,000
80905
• 1048 Florence Ave.
$305,000
• 425 W. Boulder St. $365,000
• 331 Cheyenne Blvd.
$400,000
• 614 Kinnikinnik Drive
$415,000
• 389 Hilltop Circle $479,000
• 124 S. Favorite St. $625,000
• 403 Millstream Terrace
$630,000
• 126 Celestine St. $635,000
80906
• 1935 Tanager Way $311,000
• 1676 Maxwell St. $317,000
• 405 Crestridge Ave.
$580,000
• 15 Mobray Court $725,000
• 3168 S. Electra Drive
80907
• 3100 Wood Ave. #17-F
$50,000
• 114 S. 16th St. $309,000
• 910 Dunston St. $340,000
• 1199 Stanton St. $385,000
• 2857 Jon St. $420,000
• 403 E. Espanola St.
$540,000
80908
• 12955 Halleluiah Trail
$109,437
• 10490 Hawks Hill Court
$275,000
• 10648 Eulcase Heights
$414,990
• 10723 White Diamond Point
$420,000
• 7539 Johnsontown View
$422,500
• 10777 Lewanee Point
$540,000
• 11163 Crisp Air Drive
$580,000
• 8219 Nat Love Drive
$597,897
• 7990 Pennydale Drive
$598,232
• 9450 Cut Bank Drive
$620,500
• 9532 Texas Jack Drive
$760,300
• 12763 Fulford Court
$820,000
• 8359 William Downing Drive
$1,047,945
• 9084 Shipman Lane
$1,325,000
• 17055 W. Goshawk Road
$1,670,000
80909
• 108 Swope Ave. $290,000
• 2821 Casden Circle $317,000
80917
• 3425 Rebecca Lane, Apt. F
$215,000
• 4285 Hedge Lane $371,000
• 4035 Haven Lane $430,000
80918
• 5502 Denmark Court
$210,000
• 3875 Blazingwood Way $310,000
• 3218 Hearthridge Circle
$320,000
• 1838 Brookdale Drive
$380,000
• 3724 Encino St. $385,000
• 3025 Vickers Drive $424,900
• 5655 Sonnet Heights
$458,900
• 7288 Berrybrook Lane $470,000
• 6259 Stemwood Drive
$500,000
• 4634 Peak Crest View
$539,891
• 4584 Peak Crest View
$557,205
80919
• 6826 Ravencrest Drive
$249,900
• 1226 Norwood Ave.
$274,000
• 1302 Darby St. $551,000
• 930 Oak Bend Court
$618,000
• 2815 Rossmere St. $950,000
80920
• 515 S. Calhan Highway
$335,000
• 1940 N. Whitehorn Drive
$395,000
• 7380 Liberty Bell Drive
$407,000
• 1632 Willow Circle $459,800
• 855 Pollux Drive $1,400,000 This list was obtained from the El Paso County Assessor’s Office and covers sales recorded during the period of March 10-16. Each listing includes the address and sales price.
• 10108 Bracknell Place $616,500
$1,229,000
• 1310 E. Bijou St. $335,000
• 905 Tia Juana St. $337,000
• 2728 Lark Drive $340,000
• 103 N. Dunsmere St.
$343,000
• 1315 Holmes Drive $360,000
• 3519 E. Uintah St. $399,000
• 615 Bridger Lane $418,000
• 2222 Wold Ave. $435,000
• 1822 E. San Rafael St.
$473,000
• 1203.E. Kiowa St. $690,000
80910
• 3607 Indigo Ridge Point
$336,000
• 3475 Charwood Lane
$346,000
• 1320 Rainier Drive $348,000
• 3908 Whittier Drive
$359,000
• 1625 Derbyshire St.
$515,000
• 1642 Grand Overlook St. $579,000
80911
• 7135 Tilden St. $345,000
• 137 Ely St. $350,000
• 6424 Gossamer St.
$358,000
• 814 Cardinal St $360,000
• 142 Judson St. $380,000
• 910 Crandall Drive $384,900
• 5465 Almont Ave. $408,000
• 4945 Haiti Way $410,000
80915
• 2488 Vanhoutte View
$374,950
• 2305 Piros Drive $375,000
• 2467 Hannah Ridge Drive
$379,950
• 1630 Yakima Drive $380,000
• 1326 Mears Drive $390,000
• 7060 Boreal Drive $435,000
80916
• 4825 Astrozon Blvd., Unit 94-A $43,200
• 456 Kitfield View $230,000
• 2307 Lexington Village Lane
$232,730
• 524 Shady Crest Circle
$240,000
• 4180 Baytown Drive
$266,000
• 3360 Galleria Terrace
$349,900
• 1074 Jet Wing Drive
$359,999
• 4489 Harwood Road
$365,000
• 882 Hoosier Drive $379,900
• 4685 N. Anjelina Circle
$390,000
• 3375 Castellon Drive
$459,999
• 4275 Basswood Drive
$449,900
• 4990 Squirreltail Drive
$485,000
• 5035 Culpepper Court
$525,900
• 8698 Blue Feather Loop
$536,200
• 8344 Cooper River Drive
$539,500
• 2835 Dynamic Drive
$690,000
• 9533 Hollydale Court
$757,000
80921
• 11319 Modern Meadow Loop
$465,000
• 14173 Albatross Drive
$538,810
• 315 Palm Springs Drive
$610,000
• 2042 Zenato Court $650,000
• 1063 Deschutes Drive
$659,900
• 12629 Chianti Court
$980,000
• 1664 Vine Cliff Heights
$3,700,000
80922
• 6170 Jaffee Court $420,000
• 4838 Turning Leaf Way
$465,000
• 5353 Blackcloud Loop
$525,000
• 4654 Hotspur Drive
$530,000
• 6715 Turkey Tracks Road
$535,000
• 2718 Show Hunter Way
$585,000
• 2608 Northridge Drive
$710,000
80923
• 4715 Walking Horse Point $365,000
• 5115 Balsam St. $401,500
• 6209 Miramont St. $425,000
• 5140 Paradox Drive
$440,000
• 5992
New report analyzes variation in effective property tax rates
The
have
a detailed, city-by-city analysis
property tax rates for the 2024
The report identifies four factors that explain the variation in effective property tax rates: property tax reliance, property values, level of government spending and how local tax systems treat different types of property.
This annual study evaluates effective tax rates (property taxes as a percentage of market value) of 75 large U.S. cities and 50 rural municipalities (one in each state) on homestead, commercial, industrial and apartment properties. The data reveals that high effective property tax rates usually arise from some combination of high reliance on property taxes, low home values and higher local government spending.
“Even though this year’s report shows that the average effective tax rate on a median-valued home in each state’s largest city fell by over 5% compared to 2023, about 20 of these 53 cities experienced an increase in effective tax rates,” said Bethany Paquin, senior research analyst at the Lincoln Institute of Land Policy. “Differences in the structure of state property tax systems, reliance on the property tax versus other state and local taxes, property tax relief policies, how property is classified, and local preferences all play a role in the variation we see in property tax rates on homes across the country.”
Detroit, Michigan, has the highest homestead effective property tax rate in the country, primarily because of the city’s low home values. A medianvalued home in Detroit faces an effective property tax rate of 3.02%. In contrast, high property values, low local government spending and classification that favors homeowners all contribute to Honolulu, Hawaii’s lowest-in-thenation effective tax rate of 0.30 %. K–12 education is the largest expenditure for local governments across the U.S., but in Hawaii school funding is centralized at the state level, contributing to lower
local government spending. These cities illustrate how the size of a local government’s tax base, the public services it provides, and its state and local government tax structure influence homeowner property tax rates. Another key driver of tax disparities is the use of assessment limits, which restrict how fast property values can rise for tax purposes. While intended as tax relief, the report finds these limits shift the tax burden to new homeowners, particularly in highgrowth markets, while rewarding long-time owners. In cities like Tampa,
Fla., Los Angeles, and Miami, a new homeowner might pay at least double the property taxes a neighbor in an identical home pays.
In many states, commercial, industrial, and apartment properties face higher effective tax rates than homes due to classification systems that favor homeowners. In Charleston, South Carolina, due to classified tax rates and an exemption for homeowners from property taxes for school operations, commercial and apartment buildings are taxed at nearly six times the rate of owner-occupied homes, raising
concerns about impacts on renters and small businesses.
“Although effective tax rates are the best way to compare levels of taxation across jurisdictions, whether a rate is high or low doesn’t tell the whole story,” said Bob DeBoer, research director at the Minnesota Center for Fiscal Excellence. “This report is the best representation of the design of property tax systems across the country and reminds us that state policy decisions can result in dramatic differences in tax burdens between different classes of property.”
The report’s analysis of the largest city in each state shows that the average effective tax rate on a median valued homestead was 1.22% in 2024 for this group of 53 cities. At that rate, a home worth $200,000 would owe $2,440 in property taxes (1.22% x $200,000). On the high end, three cities have effective tax rates at least two times higher than the average — Detroit, Aurora (Ill.), and Portland (Ore). Conversely, eight cities have tax rates half the study average or less — Honolulu (Hawaii), Boston, Charleston (S.C.), Salt Lake City, Denver, Huntsville (Ala.), Nashville (Tenn.) and Boise (Idaho).
To dive into the property tax rates on commercial properties, understand the preferential treatment of homeowners, and see more property tax analysis, read the 50-State Property Tax Comparison Study on the Lincoln Institute’s website www.lincolninst.edu/ publications/other/50-state-propertytax-comparison-study-2024/.
Increase in home appliance technology brings decrease in satisfaction
With home appliances becoming more connected with increased technologies, customer concerns about durability, functionality and performance have increased, according to the J.D. Power 2025 U.S. Appliance Satisfaction Study, released recently. Overall satisfaction has dropped 11 points (on a 1,000-point scale) to 699 from 710 in 2024. Additionally, durability satisfaction decreased 11 points to 695; features and settings satisfaction decreased 13 points to 668; and ease of use satisfaction decreased 9 points to 730.
“Increased connectivity often leads to increased confusion,” said Michael Taylor, senior managing director of retail intelligence practice at J.D. Power. “Our data shows that younger generations — particularly Gen Y and Gen Z — tend to expect a more intuitive user experience, yet they report more issues. We’ve
also found that customers with Wi-Ficonnected appliances encounter more problems overall. Regardless of age, the takeaway is clear: simplicity in design and functionality can be an advantage.”
The study measures customer satisfaction in 12 segments of major home appliances: cooktops; freestanding ranges; wall ovens; overthe-range microwaves; dishwashers; French door refrigerators; side-by-side refrigerators; top-mount freezers, twodoor refrigerators; front-load clothes washers; top-load clothes washers; clothes dryers; and appliance retailers.
STUDY RANKINGS
• Cooktop — Whirlpool (718) ranks highest in customer satisfaction among cooktops. Samsung (717) ranks second and Bosch (704) ranks third.
• Freestanding Range — LG (691) and Samsung (691) rank highest in a tie in customer satisfaction among freestanding ranges. Frigidaire (687) ranks third.
• Wall Oven — Bosch (749) ranks highest in customer satisfaction among wall ovens. Whirlpool (705) ranks second and Frigidaire (697) ranks third.
• Over-the-Range Microwave — Frigidaire (736) ranks highest in customer satisfaction among over-therange microwaves. Whirlpool (707) ranks second and Samsung (704) ranks third.
• Dishwasher — Bosch (711) ranks highest in customer satisfaction among dishwashers. Samsung (699) ranks second and Whirlpool (696) ranks third.
• French Door Refrigerator — LG (724) ranks highest in customer satisfaction among French door
refrigerators. Samsung (718) ranks second.
• Side-by-Side Refrigerator — LG (713) ranks highest in customer satisfaction among side-by-side refrigerators. GE (709) ranks second and Samsung (707) ranks third.
• Top-Mount Freezer, TwoDoor Refrigerato r — Samsung (686) ranks highest in customer satisfaction among top-mount freezer refrigerators. Whirlpool (672) ranks second.
• Front-Load Clothes Washer — GE (725) ranks highest in customer satisfaction among front-load washers. LG (721) ranks second and Samsung (713) ranks third.
• Top-Load Clothes Washer — Samsung (724) ranks highest in customer satisfaction among top-load washers. Maytag (700) ranks second.
• Clothes Dryer — LG (709) ranks highest in customer satisfaction among clothes dryers. Samsung (705) ranks second.
• Appliance Retailer — The Home Depot (700) ranks highest in customer satisfaction among appliance retailers. Best Buy (689) ranks second.
The 2025 U.S. Appliance Satisfaction Study is based on 15,884 evaluations from customers who purchased home appliances during the past 12 months. The study was fielded from July 2024 through April 2025.
J.D. Power defines Pre-Boomers as born before 1946; Boomers (19461964); Gen X (1965-1976); Gen Y (1977-1994); Gen Z (1995-2009). Millennials (1982-1994) are a subset of Gen Y.
the terms of the Restatement of Stipulations or on C.R.C.P. Rule 60. 19. Under paragraph 56 of the Restatement of Stipulations, the Court is authorized to enter an order replacing and superseding the Restatement of Stipulations with the Second Restatement of Stipulations. a. Paragraph 56 of the Restatement of Stipulations provides that “any controversy or claim arising out of or relating to the Management Plan or to the rights and obligations of any party hereto shall be settled by petition in these proceedings by and party or combination thereof to the District Court of Water Division No. 2.” b. The Restatement of Stipulations is both a contract between the parties and an order of the Court. Burlington Ditch Reservoir & Land Co. v. Metro Wastewater Reclamation Dist., 256 P.3d
as the Restatement of Stipulations was set to expire on June 1, 2025, but has been extended by the Court for the pendency of this Joint Motion. 22.Second, a C.R.C.P. 60(b) motion must be made “upon terms as are just.” See also Building and Trades Council, 64 F.3d at 887 (proposed modification must be suitably tailored to changed circumstances). The terms of the Second Restatement of Stipulations are just and suitably tailored to changed circumstances for the following reasons: a. The Second Restatement of Stipulations does not enlarge any of Movants’ decreed water rights and will not injure or prejudice any other person or party; b. The Second Restatement of Stipulations is an internal agreement governing Movants’ diversions from the Widefield Aquifer and does not affect or modify their decreed augmentation obligations to Fountain Creek which are established by Movants’ respective plans for augmentation. Movants must still operate their wells in a manner that does not cause injury to other water users, either within or outside of the aquifer, and must meet the augmentation requirements under their decrees; c. The Second Restatement of Stipulations does not supersede the authority of the State and Division Engineers to administer the Widefield Aquifer under the priority system; and d. The Restatement of Stipulations was set to expire by its own terms on June 1, 2025, but has been extended by the Court for the pendency of this Joint Motion. 23. Under C.R.C.P. 60(b)(4), a party seeking modification of a decree must establish that a significant change in facts or law warrants revision of the decree and that the proposed modification is suitably tailored to the changed circumstance. Building and Trades Council v. N.L.R.B., 64 F.3d 880, 887 (3d Cir. 1995) (construing federal counterpart to C.R.C.P. 60(b)(4) in context of consent decree) citing Rufo v. Inmates of Suffolk County Jail, 502 U.S. 367 (1992); see also Appellee v. Binkley (In re Anderson-Binkley), 2012 Colo. App. LEXIS 2955, *3 (“Relief is available under the rule when conditions have changed since a judgment entered, making continued enforcement of the judgment inequitable.”). a. As described in section II above, the significant change in fact or law is Widefield’s decree in Case No. 22CW3040 that allows Well No. W-7 to be used as an alternative point of diversion for Well No. W-13. Well No. W-13 is included as a structure in the Restatement of Stipulations (See Exhibit A, Map of Reaches)
Majority of shoppers looking to relocate for budget, lifestyle
With affordability still out of reach for many, a new report from Realtor.com found 58.9% of online home shoppers in the 100 largest U.S. metros looked outside their current metro in the second quarter of 2025, up from 48.1% in 2019, as buyers seek homes that better fit their budgets, job flexibility and lifestyle needs.
“Affordability remains a primary driver of home searches, but evolving workplace policies, job opportunities and shifting local conditions also play a role. As regional housing trends diverge, home shoppers tapped the brakes compared to a year ago, but accelerated their searches elsewhere compared to 2019, across the 100 largest metros with sizable variation across markets,” said Danielle Hale, chief economist at Realtor.com. “Despite the year over year step back, Americans continue to take a broader view of where they can live, often looking beyond their current metro areas in hopes of stretching their dollar and improving their lifestyle.”
Big cities dominated the top 10 metros as current residents overwhelmingly searched out of their markets driven by affordability challenges. San Jose, Calif., had the highest share of outbound search traffic, with 93.7% of shoppers looking at listings elsewhere. More than one-third of that activity was aimed outside California altogether.
Washington, D.C. (86.4%), Seattle (80.5%), and Salt Lake City (77%) also topped the list of metros with the most local residents eyeing an out of metro move. Notably, big cities New York, Boston and Chicago joined the top 10 metros with the highest outof-market search rates — reflecting a combination of rising home prices and growing unemployment.
Pandemic-era boomtowns losing steam as affordability wanes
Several cities which saw a surge in demand during the COVID-19 pandemic are now experiencing rising outbound interest as affordability erodes and return-to-office mandates take hold.
In Phoenix, the share of out-of-market views rose 28.5 percentage points over the past six years. Spokane, Wash.,
and Fresno, Calif., saw similar jumps of 27.7 and 21.3 points, respectively. McAllen, Texas, which once attracted pandemic-era buyers with its low cost of living, is now seeing an exodus as home prices rise and buyers redirect their attention to larger, higher-wage, high employment markets such as Austin and San Antonio.
High home prices, unemployment drive out-of-metro searches Metros with the biggest increases in outbound search activity often experienced large jumps in home prices and rising unemployment over the past six years. Nine of the top 10 metros with the biggest loss
in popularity also saw prices jump more than 27% since 2019, with Boston seeing home prices climb 42.5% and Spokane, Wash., seeing home prices climb 47.9%. Chicago, the slowest growth market, saw prices grow 12.2%.
Relative affordability is the trend for cities holding on to their residents
Even as many metros lose shoppers to other regions, a handful are seeing increased loyalty from local buyers. San Francisco stands out with a decline in outbound search activity, from 68.9% in 2019 to 62.9% this year. Despite its high cost of living, recent improvements in affordability compared
to neighboring metros — and signs of urban revitalization — may be helping retain residents.
Other metros that gained in popularity with their local shoppers include Portland, Ore.; Houston; Detroit; and Honolulu, Hawaii. Many of these cities offer a blend of economic opportunity, relative affordability and quality-of-life amenities.
Affordability drives searches regionally
The Western U.S. had the highest share of out-of-market search activity, with 65.1% of shoppers in the region viewing listings elsewhere. However, the Northeast saw the largest increase over the past six years, rising from
45.4% to 58.8% as more residents in high-cost cities explored lowerpriced alternatives. While shoppers in the Midwest were more likely to stay local, with just 54% of views going to other metros, every U.S. region saw more than half of search activity directed out of the market — something that only the West saw six years ago.
Methodology
This report analyzes views of for-sale listings on the Realtor.com marketplace in the Top 100 metros between April and June. More data can be found at www.realtor.com/research/reports/ cross-market-demand/.
