Out-of-state buyers add to scramble for Twin Cities homes

The hottest Twin Cities housing market in decades is sparking bidding wars with offers well above asking price, prompting bewildered questions from shellshocked combatants:

Where are all these buyers coming from? And where are they getting the cash?

Real estate listing sites reveal part of the answer. A growing number of house hunters in the Twin Cities are out-of-staters brandishing windfalls from sales of coastal market houses where ramblers fetch seven figures. Their tidy sums provide an outsized advantage in a metro market where asking prices are a relative steal.

During the first three months of this year, nearly a quarter of the people shopping for a house in the Twin Cities on Redfin, a national online real estate website, lived outside the area in more expensive cities such as New York and Denver. On average, those out-of-towners had house-buying budgets of $751,800, 61% higher than local buyers. Only two other U.S. markets saw higher price disparities.

“That means more locals will lose at bidding wars,” said Taylor Marr, lead economist at Redfin. “It’s good for economic growth, but at the same time locals are losing out on homes from people who have extra…