Cash incentives push work-from-home employees to explore new housing markets
More than 26,000 homebuyers applied for cash grants in Arkansas
Bentonville, Arkansas business leaders are hoping the rise of working from home will help diversify their economy. FOX Business’ Connell McShane with more.
U.S. homebuyers are facing an increasingly competitive housing market. Still, cash incentives offered in certain cities and states are convincing many of them – especially those with the freedom to work from home – to take the plunge.
One state looking to draw in "top talent" is Arkansas. In fact, the Northwest Arkansas Council announced that it would pay potential homebuyers $10,000 to move to the region and "set up your new life in Northwest Arkansas."
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The program – the Life Works Here – saw an influx of applications. In fact, it "generated more than 26,000 applications from candidates in more than 115 countries and all 50 states eager to move to Northwest Arkansas," the Northwest Arkansas Council announced.
A home for sale on the water in Chattanooga, Tennessee (Bruce McCamish for Alliance Sotheby’s International Realty)
"Northwest Arkansas has emerged as one of the most desirables places to live in the country, positioning the region as a top destination in an economy redefined by remote work opportunities," Mervin Jebaraj, director of the Center for Business and Economic Research at the Sam M. Walton College of Business, said in a statement in April.
Another spot down south, Chattanooga, Tennessee, is also willing to put up some cash to draw in more remote workers.
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The city's GeekMove incentive program, which is no longer accepting applications, was "designed to assist computer developers who are interested in relocating" to the area according to the Gigcity.
And once consumers experience an area, like Chattanooga, they are even more inclined to take the plunge, agents Sandy Poe and RJ Bindner of Alliance Sothebys International Realty told FOX Business.
A home for sale on the water in Chattanooga, Tennessee (Bruce McCamish for Alliance Sotheby’s International Realty)
"They tell us that Tennessee is just one of several states they are exploring. However, upon visiting east Tennessee, they decide pretty quickly that this is the place for them," RJ Bindner said.
The cash incentives, according to experts, help buyers who are still on the fence about whether they should buy or rent in a particular area.
On the flip side, it also helps an area reel in consumers who are "committed to the neighborhood and the community" and not just real estate investors, Carolina Gerdts, executive vice president of RelatedISG International Realty, told FOX Business.
"The reason these cities are offering such great programs right now is that they do not want property flippers or investors," Gerdts said, noting that emerging cities like Fort Lauderdale, Miramar and Hollywood in South Florida are perfect examples.
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"The purpose of these grants is to create diverse communities and build neighborhoods versus having investors buy up properties," she said. "This also impacts the school system for neighborhoods with these incentives making the education provided much higher. "
A home for sale on the water in Chattanooga, Tennessee (Bruce McCamish for Alliance Sotheby’s International Realty)
In many cases, these cash incentives can be used toward the buyer's down payment and closing costs, Gerdts added. However, there are terms to be aware of.
"For example, some might require the buyer to live in the home for 10 years — if not the grant money must be paid back," she said.
In other cases, they may require consumers to be first-time homebuyers although this can be "any person who has not owned a real estate property in three or more years, so if you owned a home five years ago, you would qualify," she said.