Seven Markets Where Home Prices Are Surprisingly Reasonable

by Steve CookNovember 10, 2017

Home prices have soared in many communities over the past three years. The national median home price has risen more than 17 percent since September 2014, but prices still vary greatly by location.

For retirees, families in the market for a second home and real estate investors who can choose where they want to buy a home, affordability is a critical factor today. The days when bargains could be found in thousands of depressed housing markets are over. As prices rise above the peaks set during the housing boom ten years ago, good deals in communities where prices are still reasonable are harder to find. Here are six housing markets that are surprisingly affordable today.

Charlotte, North Carolina

Located within the southern Piedmont of North Carolina, along the state’s border with South Carolina, getting to Charlotte is easy from anywhere in the country or the world, hence its nickname “the International Gateway to the South.” Accessibility is one reason Charlotte has become a major US financial center with the third most banking assets after New York City and San Francisco, and it’s home to six Fortune 500 companies. Charlotte’s vibrant economy keeps unemployment low and it attracts retirees who are looking for a milder climate, lower housing costs, and part-time employment. Home prices are below the national median, but rising quickly. In 2017, US News and World Report ranked Charlotte as the 14th best place to live in America.

Median home price in Q2 2017: $234,300 (11% below the national median). Price appreciation rate in Q2 2017: 7.4%
View on uptown Charlotte, NC from Marshall Park

Cleveland, Ohio

The second largest city in Ohio, Cleveland is located on the southern shore of Lake Erie, approximately 60 miles (100 kilometers) west of the Pennsylvania border. Cleveland’s economy has diversified sectors that include manufacturing, financial services, healthcare, and biomedical. Cleveland is also home to the Rock and Roll Hall of Fame and many professional sports teams. Typical of the Great Lakes region, Cleveland’s climate has four distinct seasons. Summers are warm to hot and humid, while winters are cold and snowy. Cleveland’s melting pot of immigrant groups and their various culinary traditions have long played an important role in defining the local cuisine. Cleveland is attracting real estate investors because it is among the most affordable markets when compared to the national average.

Median home price in Q2 2917: $168,600 (49 percent below the national median). Price appreciation rate in Q2 2017: 4.9%
Downtown Cleveland Ohio rises above the Cuyahoga River at Heritage Park in morning light.

Grand Rapids, Michigan

The second-largest city in Michigan, Grand Rapids is on the Grand River about 30 miles east of Lake Michigan. A historic furniture-manufacturing center, Grand Rapids is home to five of the world’s leading office furniture companies and is nicknamed “Furniture City.” The city and surrounding communities are economically diverse, based in healthcare, information technology, automotive, aviation, and consumer goods manufacturing industries, among others. In 2016, The New York Times ranked Grand Rapids 20th on the 52 Places to Go in 2016, with Grand Rapids featured among other cities such as Abu Dhabi, Bordeaux, and Mexico City.

Median home price in Q2 2017: $182,700 (40 percent below the national median). Price appreciation rate in Q2 2017: 13.7%
A scenic view of Grand Rapids riverfront.

Jacksonville, Florida

The most populous city in Florida, Jacksonville is a major military and civilian deep-water port. Jacksonville’s economy features services such as banking, insurance, healthcare, and tourism, which employs 10 percent of the local workforce. Known for stretches of beautiful beaches and waterways, Jacksonville is home to the largest urban park system in the country, cultural and historical spots. Forbes picked Jacksonville as one of the 20 best cities for travel in 2016.

Median home price in Q2 2017: $232,500 (9 percent below the national median). Price appreciation rate in Q2 2017: 8.1%
A view of Jacksonville, FL.

Nashville, Tennessee

Though Music City USA is famous for its country music, Nashville’s largest industry is healthcare. It is home to more than 300 healthcare companies, including Hospital Corporation of America (HCA), the world’s largest private operator of hospitals. The healthcare industry contributes $30 billion per year and 200,000 jobs to the Nashville-area economy. With the third fastest-growing economy in the nation this year, Nashville is becoming a southern boomtown, adding an average of 100 people a day and an unemployment rate of just 3.80 percent. Future job growth over the next ten years is predicted to be 41.12 percent, and home values are rising quickly. Nashville’s fast growth and relatively cheap housing stock have made it a mecca for real estate investors. A recent PricewaterhouseCoopers report ranked Nashville in the top ten markets for single-family rental, ahead of San Francisco, Los Angeles, Boston, New York, San Diego, and Chicago.

Median home price in Q2 2017: $248,500 (2.7 percent below the national median). Price appreciation rate in Q2 2017: 8.1%
Downtown Nashville, TN.

New Orleans, Louisiana

The Big Easy has come a long way since Hurricane Katrina ravaged its residential neighborhoods 11 years ago. Nearly 50,000 new jobs were added in the metro area between 2010 and 2014. But 7 out of 10 jobs added in those years paid less than the average local wage, according to a Brookings Institution study. Job growth in hospitality and retail have outpaced growth in industries that city leaders are banking on for the future, like water management and digital production. It’s also one of the worst markets for renters, which makes it a good one for home sellers and investors in single-family renters. Some 35 percent of renters in the New Orleans-Metairie-Kenner statistical area devote 50 percent or more of their income to rent and utilities, only slightly less than top-ranked Miami where the rate was 35.7 percent. New Orleans now ranks 17th for the highest rents in the United States. Throughout Louisiana, a person making minimum wage ($7.25/hour) would need to work 89 hours per week to rent a two-bedroom unit comfortably, and 74 hours to rent a one-bedroom unit at 30 percent annual income. New Orleans home prices were up this past year compared to the previous few years; one-year appreciation rates of 10.9% by far exceeded that of the national average at 4.9%; and yet, property prices continue to be among the most affordable in the country. Though the appreciation rate has fallen this year, high rents and lower than average acquisition costs make New Orleans a prime market for single-family rentals.

Median home price in Q2 2017: $202,000 (21 percent below the national median). Price appreciation rate in Q2 2017: 3.1%
New Orleans Louisiana downtown skyline cityscape of the hotel district and commercial waterfront across the Mississippi River.

Orlando, Florida

One of the world’s premier vacation destinations, Orlando’s famous attractions form the backbone of its tourism industry, especially Walt Disney World and the Universal Orlando Resort, which opened in 1999 as a major expansion of Universal Studios Florida. Orlando is also a major industrial and hi-tech center. The metro area has a $13.4 billion technology industry, employing 53,000 people and is a nationally recognized cluster of innovation in digital media, agricultural technology, aviation, aerospace, and software design. More than 150 international companies, representing approximately 20 countries, have facilities in Metro Orlando, and the Orange County Convention Center is the second-largest convention facility in the United States. Orlando’s housing economy suffered severely with the housing crash: housing prices in Greater Orlando went up 37.08% in one year, from a median of $182,300 in November 2004 to $249,900 in November 2005, and eventually peaked at $264,436 in July 2007. From there, with the economic meltdown, prices plummeted, with the median price falling below $200,000 in September 2008, at one point falling at an annual rate of 39.27%. The median dipped below $100,000 in 2010 before stabilizing around $110,000 in 2011. By the end of the second quarter of 2017, the median home price has returned to $245,000, still below its 2007 peak. For homeowners seeking a second home and investors, Orlando is still a good deal.

Median home price in Q2 2017: $245,000 (4 percent below the national median). Price appreciation rate in Q2 2017: 9.4%
The Spaceship Earth Sphere at Epcot Center Illuminated At Night in Walt Disney World in Orlando Florida
As the housing recovery ends its fourth year, prices in the first markets to boom — in California, Texas, and some parts of Florida — have surpassed peak prices during the housing boom. Now markets like Grand Rapids, Charlotte, and Jacksonville are catching up. Good values in housing can be found today in markets that missed the first run-up in prices and still offer quality properties at prices lower than the most of the nation.

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About The Author
Steve Cook
Steve Cook is editor and co-publisher of Real Estate Economy Watch. He is a member of the board of the National Association of Real Estate Editors and writes for several leading Web sites, including Inman News. From 1999 to 2007 he was vice president for public affairs at the National Association of Realtors.