The hot housing market is pushing locals out of their beloved hometowns

When 30-year old Kerry Sherin first moved to Austin, Texas in 2013, she immediately fell in love with the area and its fun, college-town vibe. The two-bedroom, one-bathroom apartment she shared with a roommate was easily affordable on her then entry-level salary, and the location — dreamy.

Fast forward to 2021 and just about everything, other than the consistently good weather, has changed, said Sherin.

“Everyone’s migrating here so it’s getting busier and busier. Traffic is out of control," said the Maryland native.

But it's the competition for housing — particularly given the influx of high-skilled tech workers and out-of-state buyers with "pockets loaded with cash" — that's making Austin literally unlivable for Sherin, who's emotionally ready to buy a home after saving for a down payment for years.

“Developers are leveling old houses that would have been perfect for me — as-is," she said. "I would really hate to leave, but it’s almost like I’m getting pushed out.”

Locals in other hot markets, where home prices and rents are rising by the double digits, are feeling the same way.

“Displacement is one of the greatest issues across the country impacting long-term residents from the greater Miami area to Asheville [in North Carolina] and from Rutland, Vermont to Coeur d’Alene [in Idaho],” said George Ratiu, manager of economic research at realtor.com.

Nowhere is this more apparent than in Boise, Idaho, where home prices are 38.8% higher than they were a year ago, according to Dawn Templeton, one of the area’s top real estate agents.

“It’s been a little nutty," Templeton said. “Remote workers, families, entrepreneurs, and retirees are all coming to Boise for the recreational lifestyle” that locals have coveted for years, Templeton said.

“We’re feeling the growing pains and some of the locals don’t like the growth," she added. "They’re finding things challenging.”

Just ask 49-year old John Evans, who was born and raised in Boise.

“We’re being bombarded with newbies from all over the place," he said. "A lot of them are selling their big homes for complete fortunes, and then bombing into Boise in their fancy cars and buying places that are twice the size, but half the price.”

Evans is becoming resentful, particularly since he and his wife, now expecting their third child, are in need of a larger home.

“I’d love a bigger yard and more outdoor space, but I’m not in a position to make an all cash, no-contingency offer, nor am I willing to go $100,000 over asking, which is what we’re up against," he said. "Newbies are literally throwing money at everything, leaving guys like me in the dust."

Melanie Musson of Bozeman, Montana, can relate. She has lived in town for nearly 20 years, and while the influx of outsiders — and price escalation — has been more gradual, it’s readily apparent.

“Bozeman used to have a small, western feel, but now it’s much more congested and is starting to feel uppity — like Jackson Hole,” she said. “People are coming in trying look like cowboys with the boots and the ripped jeans, but these cowboys have never seen the field, let alone worked on one.”

Nevertheless, Musson still loves all that Bozeman has to offer — skiing, camping, and hiking — along with the friendships she has formed over the years in her local community. Problem is, she and her husband have outgrown the four-bedroom condo they bought 13 years ago. After all, they now have five children — ages one to 11.

“We’re doing our best to make it work for us, but one of the kids is in a crib and another one is sleeping in a pop-up tent on the floor,” said Musson. “The logical thing to do would be to move into a single-family home, but even with our incomes increasing at a typical rate, and even with the equity in our condo, it’s still not affordable.”

“No one could have anticipated that the COVID-19 pandemic would change housing market dynamics the way it did or that it would make it this difficult for local residents to find anything affordable to buy,” said Rick Sharga, executive vice president of RealtyTrac, a real estate information company. “The accelerated home price appreciation caught everyone off guard.”

Personal Finance Journalist Vera Gibbons is a former staff writer for SmartMoney magazine and a former correspondent for Kiplinger's Personal Finance. Vera, who spent over a decade as an on air Financial Analyst for MSNBC, currently serves as co-host of the weekly nonpolitical news podcast she founded, NoPo. She lives in Palm Beach, Florida.