We all know it's a buyer's market for real estate. But which cities offer the biggest bargains and why is it so cheap there? Here are the top five cities for buying low-priced real estate with the average home sale prices according to www.realtor.com.

  1. Detroit, MI. Average home sale price: $69,660.

    Devastated by the fall of the automotive industry and its associated manufacturing and services, Detroit offers rock-bottom real estate prices. Real estate in Neighborhood Enterprise Zones and Homestead Districts also receive property tax breaks. The Bureau of Labor and Statistics reports an unemployment rate of 17.3% (as of September 2009) for Detroit's 916,952 citizens.

    The good news is the city is working to reinvent itself by wooing companies in high-growth industries such as life sciences and information technology. Those who can stick out the transition benefit from a cost of living 26.5% lower than the national average.

  2. Indianapolis, IN. Average home sale price: $102,495.

    Rated by Forbes as one of the top 40 safest cities, Indianapolis is more than just the home of the Indianapolis Motor Speedway. The population of 795,458 enjoys a cost of living 32% cheaper than the average U.S. city. The unemployment rate is 7.7%.

    The city is accessible to multiple colleges and universities, which feed its major industries of life sciences, advanced manufacturing, logistics and information technology. (Learn the tricks of buying a home in a down market. Check out 5 Tips For Recession House Hunters.)

  3. Omaha, NE. Average home sale price: $148,196.

    The city of Omaha has a population of 424,482. Though it sits in the middle of the agricultural heartland, Omaha is home to Fortune 500 companies Berkshire Hathaway, Union Pacific, ConAgra and Peter Kiewit Sons.

    The unemployment rate is only 4.8% and the cost of living is 22% cheaper than the national average. Residents benefit from: high-quality clean air, major educational institutions (the University of Nebraska Omaha and Creighton University) and a crime rate lower than the national average.

  4. Des Moines, IA. Average home sale price: $151,843.

    The Des Moines real estate market did not dip as much as other parts of the country with home prices decreasing a modest 5.6% over the past year. Des Moines is the capital of Iowa with a population of 196,998. The cost of living is 20% cheaper than the rest of the United States. The state sales tax is only 6% and the unemployment rate is also 6%. Major industries in Des Moines include: financial services, insurance, manufacturing and trade services.

  5. Bismarck, ND. Average home sale price: $161,247.

    Bismarck's population of 59,503 has grown 5% since 2000. The city is home to multiple colleges and universities. The major employers in town include: government, healthcare, agriculture and manufacturing. Up and coming ventures include oil drilling and wind-turbine energy generation.

    The cost of living is 21% cheaper than the national average. The unemployment rate is only 2.9% - low enough the make employers wonder if they'll be able to find enough employees. (When the housing market slumps, you'll need these tips to weather the storm. Don't miss Closing A Real Estate Deal In A Down Market.)

The Bottom Line
The cheapest real estate prices are available in the Midwest. These cities benefit from the abundance of land, sometimes surrounded by vast stretches of rich farmland. They are generally smaller cities that offer a slower pace of life.

With the exception of Detroit, the cities with the cheapest real estate have managed to escape some of the worst impacts of the economic downturn and have plans to take advantage of high growth opportunities.

Please note that the prices listed are a snapshot based on the data available. Real estate prices are fluid and impacted by multiple factors in a given geographic area.

Related Articles
  1. Budgeting

    Preventing Medical Bankruptcy

    If you’re worried medical expenses could overwhelm you, there are some thing you can do to ease your concerns.
  2. Savings

    The Worst Financial Problems Ultra-High-Net-Worth-Individuals (UHNWIs) Face

    Understand how the problems of ultra-high-net-worth individuals (UHNWIs) are different from ordinary problems, and identify the unique financial challenges they face.
  3. Economics

    4 Countries in Recession and Crisis Since 2008

    See which major world economies haven't recovered from the global recession in the early 21st century, including a long-stagnant industrial power in Asia.
  4. Economics

    What to Expect From Mortgage Rates in 2016

    Understand the factors that influence the direction of mortgage rates, and use this information to project what will happen with rates in 2016.
  5. Retirement

    No COLA Reduces Buying Power of Retirees

    The lack of a Social Security cost-of-living adjustment next year will result in higher costs for retirees, with some affected more than others.
  6. Retirement

    The Cheapest Places to Retire in India

    Outside the major metroplexes of Mumbai and Delhi are many quieter locations ideal for retirees – and they offer less expensive living costs as well.
  7. Economics

    Top 5 Cities with the Highest Inflation in the US

    Find out which American cities are hit hardest by inflation, and why California residents find themselves in a bigger pinch than anyone else.
  8. Investing

    Is the Number of Workers in the U.S. Declining?

    The number of workers in the U.S. labor force is declining. What caused it and what is the solution?
  9. Economics

    Is the CAPE Ratio Predicting an Era of Low Returns?

    When the the CAPE ratio is high, as it is now, it can indicate a bubble economy nearing its peak. Are we headed towards another bust?
  10. Personal Finance

    5 U.S. Cities With High Paychecks and a Low Cost of Living

    Consider these U.S. hubs where workers get paid competitive salaries while enjoying a high quality of life due to a low cost of living.
  1. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  2. Is Social Security inflation-protected?

    Social Security benefits are inflation-protected. Social Security was created in 1935, and taxes were collected for the first ... Read Full Answer >>
  3. Do interest rates increase during a recession?

    Interest rates rarely increase during a recession. Actually, the opposite tends to happen; as the economy contracts, interest ... Read Full Answer >>
  4. Why isn't the cost-of-living adjustment mandatory?

    A cost-of-living adjustment, or COLA, is a purchasing power protection mechanism provided to all monthly Social Security ... Read Full Answer >>
  5. What are the risks of annuities in a recession?

    Annuities come in several forms, the two most common being fixed annuities and variable annuities. During a recession, variable ... Read Full Answer >>
  6. Are Social Security benefits adjusted for inflation?

    Social Security benefits are adjusted for inflation. This adjustment is known as the cost of living adjustment (COLA). For ... Read Full Answer >>

You May Also Like

Trading Center