US Cities with the Lowest House Prices
As the US economic forecast and real estate outlook dims amidst the latest upswing in Corona Virus infections, Americans are increasingly looking to move out of big cities to lower cost rural regions.
It’s not like Americans have never thought of moving to the burbs or small towns where the quality of life is cleaner, less expensive and better for children. What’s changed is the opportunity and need to move to them.
Online home search data is showing more out of town searches. Which are the best cities to move to? That might depend on a lot of factors. Let’s take a look at why it’s happening and where buyers might be headed.
Some home buyers are looking for resale houses, maybe new construction, perhaps less expensive than their city dwellings. And they’re hoping for a cheaper cost of living (or even cheaper rent). Some will sell their house to rent elsewhere, just to escape the crowding and fear in the city.
Volatility in the Housing Market Forecast
The economic events makes a reliable housing market forecast very difficult, but one prediction might hold for a while – buyer interest in houses for sale in rural areas of the country. The opportunity for land sales, house flipping, renovation companies, and building supply companies shouldn’t be understated.
This is a rising trend in real estate and smart Realtors are on this to capture some hot leads. It’s a good time for Realtors to relaunch their careers heading into 2021. Some Realtors might be on the move to new towns themselves because change is definitely in the wind.
A Challenging Search for Homes
Of course, for fleeing home sellers, the challenge is to find houses for sale in many regions that are only now reawakening after 30 years of economic devastation. The rust belt has never looked better for many homebuyers.
Some are finding new construction opportunities, however it won’t be easy for builders to get financing to build homes in economically slow regions.
This means these cities with the lowest prices might not be low for long. The migration will pick up pace for the rest of the year and in the chart below you can see price growth.
The outward migration of home buyers was first reported last year by Redfin who noticed the migration away from high tax, pricy cities (redfin.com/blog/q2-2019-housing-migration-report/). They found that 2 out of every 5 people searching for houses in Las Vegas were from out of town.
“Out-of-towners continue to gravitate to Phoenix for all of the quality-of-life benefits our area offers: home affordability, low taxes and cost of living, proximity to California and Mexico beaches, and natural beauty,” said Phoenix area Redfin agent Van Welborn from Redfin report.
Changes in Employment
Today, as the economy slowly recovers, job opportunities change, and oil prices rise, the destination will change. Most home buyers want a home in the country away from the misery of continuous Covid 19 outbreaks, and growing strife in the big metros of New York, Miami, Boston, Washington, Atlanta, Philadelphia, Chicago, and Los Angeles.
The migration out of New York and the Bay Area is powered further by a desire to avoid the high taxation in New York state and California. And renters too are leaving the cities, freed from their desks in Manhattan, Los Angeles, and San Francisco offices. Moving to small towns where rent might be 25% of what they were paying (e.g., New York or the Bay Area) is a godsend for millions of digital nomad “gig workers.”
Work at home is a big trend now and a return to the high cost of urban offices is unlikely. Amazon just announced their employees will continue working at home till the end of 2021.
Work at home offers big cost savings and the flight from high taxes to low tax states will help many investors, businesses, and workers stay financially viable. Low taxes in Texas and Florida would explain a lot of the attraction to Florida, and that decimated oil prices and tourism are creating lower home prices. For many, the move to other cities and states is a necessity.
Migration is Helping to Ease Home Prices in Some Cities
The Florida real estate market has seen a surge of interest, but with the record rise in infections, buyers will be rethinking buying a home there.
Will the migration continue at a growing pace? The desire to move out of the large metros in Florida, Texas and California is driven by the Covid 19 outbreaks. The sellers may unfortunately bring the disease with them to their new locations.
Buyers Migrating Reasons
⦁ homes cheaper elsewhere
⦁ taxes too high in their home cities and states
⦁ workers freed from the office chains
⦁ rural communities safer from crime
⦁ desire to live in more beautiful, clean and natural surroundings
The Media’s Role in the Migration Trend
What’s particularly awful about what’s happening this summer, is how the Democrat media deliberately hyped coverage of the riots and pressuring of the police behavioral issue, well out of proportion to its importance.
The plight of those in poverty is real and concerning, but for media networks to abuse their licensing privilege to hype the issue in an attempt to damage the President’s image and election chances is disgusting.
I mention it because this is a major factor fueling the migration away from dangerous high cost cities to towns with the lowest housing prices. States such as Indiana, Michigan, Utah, Texas, Oregon, and Idaho appear to the be the winners of the migration change.
Where are Buyers Going?
John Burns Real Estate Consulting generated this interesting infographic based on Uhaul searches. The orange dots show where they were leaving and green dots where they’re headed. Hard to validate the science but it’s a creative investigation from John Burns.
Redfin Home Buyers Searches in top 10 Metros
This graphic from Redfin hints at the strength of the homebuyer migration trend.
Kiplinger Report on Cities with the Lowest Home Prices
Kiplinger has produced a report on those cities with the lowest home prices. It’s a huge list of cities home buyers will likely be interested in. Pennsylvania, Ohio, Michigan, Alabama, Indiana, Tennessee, Arkansas, and even Texas will attract buyers with these ultra low average prices. Home prices are rising fast in some of the locales. See more data on all housing markets including Chicago, Atlanta, and New York on the US Housing update.
Realtors in these cities will likely have a good second half to their 2020 sales season.
|U.S. Metro Area||Home Price||% Price Change since Peak||% Price Change Since Market Bottom|
|El Paso, Texas||$130,000||23.1||25.5|
|Little Rock, Ark.||$145,000||11.2||12.9|
|Oklahoma City, Okla.||$158,000||30.6||32.5|
|Kansas City, Mo.||$159,000||-1.3||70.2|
|St. Louis, Mo.||$163,000||-4.5||50.2|
|Baton Rouge, La.||$178,000||18.4||23.8|
|San Antonio, Texas||$185,000||48.5||66|
|Des Moines, Iowa||$186,000||26.1||45|
|Grand Rapids, Mich.||$193,000||39.8||119.7|
|New Orleans, La.||$199,000||30.1||74.6|
|Palm Bay, Fla.||$199,000||-1.8||121.3|
|New Haven, Conn.||$201,000||-23.5||31.5|
|Cape Coral, Fla.||$220,000||-14.1||98|
|Virginia Beach, Va.||$229,000||-6.1||27.9|
|North Port-Sarasota, Fla.||$245,000||-12.1||94|
|Minneapolis-St. Paul, Minn.||$265,000||7.4||80.8|
|Las Vegas, Nev.||$275,000||-16||151.4|
|Boise City, Idaho||$290,000||48.7||161.9|
|Colorado Springs, Colo.||$304,000||49.8||80.2|
|Salt Lake City, Utah||$310,000||95.8||133.3|
|Riverside-San Bernardino, Calif.||$355,000||-9.9||110.2|
|Washington, D.C.-No. Va.||$397,000||-8.2||47.7|
Above data courtesy of Kiplinger Reports.
Bookmark this page and return for further forecasts, predictions and market data for most major US cities including Los Angeles, New York City, San Diego, San Francisco, Houston, Miami, Dallas, Phoenix, Denver, Seattle, Chicago, Boston, Tampa, Charlotte, Orlando, Anaheim, Beverly Hills, Malibu, San Jose, Fresno, Santa Clara, Mountainview, Palo Alto, Portland, Philadelphia, Sacramento, Washington, Atlanta, Myrtle Beach, Kansas City, St Louis, Minneapolis, St Paul, Madison, Sioux City, Rapid City, Fargo, Green Bay, Rockford, Oklahoma City, New Orleans, Austin, San Antonio, Oceanside, Riverside, Carlsbad, Las Vegas, Colorado Springs, Reno, and Charleston. For data on Canadian cities, see the Toronto housing report, and Vancouver housing report.
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Housing Market Forecast – copyright Gord Collins
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