While home foreclosures continue to climb and interest rates remain relatively low, it's a buyer's market for home buyers. According to the National Association of Realtors, the median U.S. house price is $181,000. But the question is how much could that buy? We did a little sleuthing on Realtor.com and found that your options vary widely.
Size (sq. ft.)
Port St. Lucie, FL
4,059 sq. ft.
5 bed/3 bath
Waterfront (lake view), includes community clubhouse w/exercise room, game room, swimming pool
Minutes from the ocean and PGA Golf Club
3,000 sq. ft.
3 bed/2 bath
Master bath w/ jacuzzi
Near downtown Bluefield, WV
Las Vegas, NV
2,404 sq. ft.
4 bed/3 bath
.11 acres, fenced in backyard
Walk-in closet master bedroom,
Close to Henderson, NV; near Lake Mead and Spring Mountains
2,310 sq. ft.
4 bed/2 bath
Across from local school, park
San Antonio, TX (Bexar County)
1,947 sq. ft.
4 bed/3 bath
.32 acres, fenced backyard, swimming pool
Oversized two car garage, patio
Near downtown San Antonio, access to great schools
1,853 sq. ft.
3 bed/2 bath
Single-level ranch style home w/ fireplace, 2 car garage
Near University of Kentucky
1,702 sq. ft.
3 bed/2 bath
Single-story ranch w/lease-option
Near Crater Lake National Park
1,459 sq. ft.
2 bed/2 bath
Ranch-style condo, large windows, walk-in closets
Near golf course and walking path
700 sq. ft.
1 bed/1 bath
14th floor condo unit with NYC skyline view
Across river from downtown Manhattan, near Liberty State Park
It Looks Good, But …
Before you pack your bags for Port St. Lucie, FL, Princeton, WV or Las Vegas, NV to snap up that big home, you should do your due diligence. That dream home might not be in a location that's all it's cracked up to be. For example...
- While Port St. Lucie, Florida was named one of Money magazine's Top 100 Places to Live in 2006, its home values have plummeted as a result of the housing crunch. In addition, the city council recently approved a 26% property tax increase. Its location near the ocean, in hurricane country and in a flood plain, can make it difficult – or at least expensive – to obtain reasonably-priced homeowners and flood insurance. And with a ranking of 10th nationwide for foreclosure rates you may find yourself living on a street with a lot of vacant homes with "for sale" signs out front. (Learn more in Closing A Real Estate Deal In A Down Market.)
- You can get a spacious home in Princeton, West Virginia, but you'll have to like small towns (its population is just over 6,000) in rural areas, and you'll have to come to terms with the fact that nearly 25% of your neighbors live below the poverty line. And don't overlook that the city has a higher than average unemployment rate, a lower than average income for working women (only $19,750 annually) and a per capita income just under $15,000. (Learn more tricks of the trade in Top Tips For First-Time Homebuyers.)
- Although Las Vegas, Nevada seems like a good bet to buy a McMansion, there's a reason. Las Vegas represents the epicenter of the housing market crash and it leads the country in home foreclosure rates. So while you may be able to buy a lot for your housing dollar, you may find yourself living in a subdivision with incomplete homes (the builders ran out of financing), a slew of homes for sale or rent (because the market is flooded and properties don't move quickly), or few neighbors (high vacancy rates). And that's not the only problem – the city itself is mired in a major economic downturn, with a higher-than-average unemployment rate, slow wage growth, and its major industries (tourism and hospitality) in a slump – all of which add up to making it hard to find a job. (Read more on getting the best deal on a house in 10 Tips For Getting A Fair Price On A Home.)
Weighing the Cost
Before you rush to put a contract on a home make sure to ask your realtor:
- How long has the property been on the market?
- How are the nearby areas zoned (i.e. do you live near a commercial area)?
- Are there any major construction/development projects scheduled for nearby?
- What is the local property tax rate?
- What is the local crime rate?
- What is the owner-occupancy rate (i.e. how many homes in the area are occupied by homeowners versus renters)?
- What are the demographics of this neighborhood?
- Are there any nearby nuisance factors I should be aware of (i.e. is the home located in the flight path of a nearby airport, near a major intersection, etc.)?
- Which are the largest local employers and what is the job growth outlook?
- Is there anything else I should know about this house or area before buying (You may be surprised what your agent remembers or reveals when you ask this open-ended question)?
In addition, consider using Google Maps to take a bird's eye look of your surrounding neighborhood. Once you have all the information you need you can determine if the potential costs and pitfalls are worth it. (See our relate articles 5 Tips For Recession House Hunters and Top 4 Things That Determine A Home's Value.)
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