With depressed housing prices, interest rates at all-time lows and little competition from fellow buyers, a real estate agent may have already waved their hands at you and exclaimed: "This is the time to buy!"
Naturally, you feel a little skeptical because you've heard the same platitudes for six months or even a year now. But according to a new report, the best bargain of all may not only be when you buy, but where you buy. (Learn more about the latest real estate news in September Real Estate Recap.)
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A Coldwell Banker survey, which compared four-bedroom, two-bathroom residences throughout 296 U.S. markets, says that the top 10 most affordable places to buy real estate are in the Midwest. Certain areas of California, known for beachfront property and many high-income enclaves, leads the nation with some of the priciest housing markets.
But for the most part, one expert says that buying a large home is attainable in a significant number of cities.
"Our study shows that homeownership in the U.S. is generally affordable with nearly 30 percent of the studied markets averaging $200,000 or less for a four-bedroom, two-bathroom home, a size many buyers aspire to own," said Jim Gillespie, chief executive officer of Coldwell Banker Real Estate LLC, said in a press release.
In 183 places, a comparable home was available for less than $300,000. So, where in America can you get a steal on a new home?
Cheapest Houses in the U.S.
- Detroit, Michigan
The recession hit Detroit, a major hub to the nation's automotive and industrial sectors, hard. The city has bled more than 350,000 jobs since its peak in 2004, Brookings Institution data reveals. And this year Forbes named Detroit the "worst city to find a job." With massive layoffs, property owners have eagerly lowered prices to unload their liability and tax burdens. In Detroit, the average list price is $68,000. (Learn more about fluctuating home prices in Why Housing Market Bubbles Pop.)
- Grayling, Michigan
The No. 2 most inexpensive spot to buy a home is a destination for outdoor activities like cross-country skiing, canoeing and fishing. As the median family income stands at slightly under $30,000, it's no wonder Grayling is near the top of the list.
- Sioux City, Iowa
The economy of another industrial foothold in the Midwest, Sioux City has struggled with plant closings and job losses through the recession. The tri-state area - bordering Iowa, Nebraska and South Dakota - has an average list price of approximately $86,000.
Most Expensive U.S. Housing Markets
While the top 10 most affordable real estate markets are all in the Midwest, California dominates the rankings for high-end properties. Here are the upscale areas, where you are likely to pay a premium for your house.
- Newport Beach, California
This beach community, widely known as the backdrop to the hit television show, "The O.C.," was also ranked the wealthiest U.S. city by Portfolio.com in 2010. The average list price is roughly $1.83 million, a whopping $1.7 million more than the typical home in Detroit.
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- Palo Alto, California
Located in the San Francisco Bay Area, the pricey homes in this locale are driven by the area's strong technology sector. The average four-bedroom home lists for $1.48 million.
- Rye, New York
A part of Westchester County, New York, Rye has been long known for upscale homes and good schools. This suburb to New York City is only 5.8 square miles in size and has an average list price is $1.33 million.
The Cost Divide
Akin to the old adage "location, location, location," where your home is located is one of the top factors influencing value. The 10 most expensive markets in the U.S. averaged homes selling for $1 million and up while the top 10 affordable markets offer four-bedroom homes for around $116,000 or less. (Learn more about the importance of location in The 5 Factors Of A Good Location.)
Though year-over-year, the cost divide between the most expensive and affordable housing markets shrunk year. In 2009, the difference was $2 million for comparable properties.