The Best Cities To Buy A Home Right Now
Buying a home is not a decision to be taken lightly. Personal finance gurus warn against purchasing unless you plan to keep it for a minimum of five years and, since the housing bubble burst, many say it’s best to buy only if it fits your lifestyle – not your investing portfolio.
For first-time home buyers shopping for a permanent, full-time residence, it’s advice to heed. But say you do simply want a place to park some of your hard-earned money, perhaps a fixer-upper you could occupy for a few years or maybe a house you believe you could rent out right away and easily oversee?
You wouldn’t be alone: investment-homes sales jumped 64.5% from 2010 to 2011, with investors making up 27% of all single-family, condo and co-op purchases last year, according to the National Association of Realtors. And it’s no wonder why. Home affordability is at the highest level ever in the 42 years that NAR has been tracking it. Nationally, home prices are down more than 30% from their 2006 peak. Mortgage rates hover near all-time lows, with 30-year fixed loans just under 4%. And while the 10-year Treasury note yields around 2% and a 1-year CD an even stingier 1% or less, housing investments, specifically homes purchased as rental properties, return a 6.3% yield on average, according to Goldman Sachs.
So you have cash or financing to make a purchase, you’re aware of the responsibilities that come with homeownership, and despite the woes continuing to hinder a full-on housing market recovery, you believe in brick and mortar investments. Now comes the tricky part: where to buy that house.
“A lot of what we read is national but you have to take housing down to the local level and look at the reasons why a market may be turning around, may be a good place to buy,” says Steve Berkowitz, chief executive of Realtor.com, a Campbell, Calif.-based home listing site.
10. St. Louis, MO
Median List Price: $159,000 (down 0.5% y-o-y)
Inventory Level: 12,819 homes (down 17% y-o-y)
Median Days On Market: 103 days (down 11% y-o-y)
Price Drop From Peak:14.3%
Unemployment Rate: 8.9%