Review: “Most Affordable U.S. Cities to Buy a Home”
By Les Christie | CNNMoney.com – Tuesday, May 24, 2012
Christie states that these 10 cities have the most affordable home prices in the nation, according to the National Association of Home Builders and Wells Fargo. With ample homes for sale under $100,000, these cities qualify as cheap places to retire.
Christie ranks these most affordable U.S. cities to buy a home by affordability score. This score reflects the percentage of homes sold that a family earning the median income could afford. It considers income, home price data, and current mortgage interest rates. Our review of this list checks Christies’s data with our own sources.
We get demographic data from a variety of government and private sources, as well as staff research on location. Other sites represent home prices in a number of ways, such as “median home price” (as in the reviewed article), “median home cost,” “median home sale price,” “median value owner occupied home,” and similar.
We use the median sales price (if available) for a 2 bedroom (2BR) home, meaning equal numbers of 2BR homes have sold at a price above or below this recent median sales price. This metric more closely estimates what you would actually pay for a typical modest retirement home. Because this number varies, we provide a rounded-off estimate. We overlay crime, healthcare, and cost of living and see how these cities stack up as retirement places.
Indianapolis, Indiana – Affordability score: 95.8%
The median 2BR home sales price in Indianapolis has been volatile within a range of $56,000 to $61,000 over the last 12 months. Clearly, the city has a lot of very affordable homes. Healthcare facilities are abundant and the cost of living is below average. Unfortunately, the crime rate is quite high, so neighborhood research is crucial. Indianapolis appears to be a good cheap place to retire.
Dayton, Ohio – Affordability score: 93.7%
As the author pointed out, the population is shrinking and so are home values. At about $50,000, the median 2BR home sales price in Dayton is very low. Dayton boasts a lot of academic institutions in the city and adequate healthcare facilities. The cost of living is well below average, so with the low housing costs, Dayton is clearly an affordable city. Crime is rather high, so again, neighborhood research is vital. Dayton seems to be a very cheap retirement destination.
Lakeland, Florida – Affordability score: 93.2%
Looking for a winter-free retirement home in Florida? Lakeland is a top value. 2BR home sales prices are still drifting lower and the median has been around $70,000 lately. Asking prices have been averaging about twice the actual sales prices, so it is clearly a buyer’s market. The crime rate is a little above average, but the economy is improving and the location is superb. Lakeland lies between the Gulf shores of Tampa Bay to the west and Orlando to the northeast. Medical centers are available in Lakeland and several nearby communities. Lakeland is a terrific place for cheap retirement.
Modesto, California – Affordability score: 92.5%
Modesto is very much a mixed bag. On the positive side, it is nicely located midway between San Francisco and Yosemite National Park and less than 100 miles from either. The median 2BR home sales price is about $70,000; not many California cities are more affordable. On the other hand, crime is above average, reflecting lower than average law enforcement staffing. The cost of living, as in most of California, is well above average. Many of the homes on the market are distressed or foreclosed. Considering these negatives, as well as the hot, dry summers, cold rain and snows in winter, and scarcity of healthcare options, Modesto is probably not a good choice for cheap retirement.
Grand Rapids, Michigan – Affordability score: 91.2%
Grand Rapids’ economy has gone through changes. Once a manufacturing giant, it has more recently become a healthcare industry center, as noted in the reviewed article. The median home sales price has drifted down to the low- to mid-$90s; figures are not available for 2BR homes in particular. The cost of living is well below average and the availability of healthcare is excellent. Crime is above average, so not all is rosy. Overall, Grand Rapids is a good place to find an affordable retirement home.
Buffalo, New York – Affordability score: 91.2%
Buffalo is one of the rust belt cities that has seen its population shrink along with jobs: unemployment is hovering around 10.4%. As Christie noted, incomes are around the national average, so those fortunate enough to be working can take advantage of the depressed housing market. The median home sales price is around $90,000. Sales prices have been steadily climbing the last few years, which helps explain listing prices for 2BR homes averaging almost $200,000 as sellers attempt to lead the market. Crime remains a serious issue at more than double the national rate. Healthcare facilities are adequate, and the cost of living is less than average. Buffalo could be a good place to find affordable retirement living if the high crime rate and legendary harsh winters aren’t a deterrent.
Ogden, Utah – Affordability score: 91.1%
Christie lists the median home price at $166,000 for Ogden. He explains how this is still affordable by western U.S. standards. The median 2BR home sales price has been hard to pin down, but the numbers we see for all size homes sold are a bit above or below $100,000. 2BR listings are steady at about $82,000, so sale prices are surely a little less. Also encouraging is the drop in crime rates that now run about the national average. Healthcare facilities are adequate, the cost of living is below the national average, and the skiing is great. Ogden would be a good place to retire for many and it seems to have a good selection of affordable homes.
Syracuse, New York – Affordability score: 90.6%
Syracuse is the only repeat from the previous review on this blog. As we said before, the cost of living is below average and the median 2BR home sales price is $80,000. Medical facilities are plentiful and include a VA hospital. Crime is somewhat above average, but for those who don’t mind the snow, the city has many features to attract residents. Syracuse University is a well-respected major university, the Finger Lakes are nearby, and the Adirondack Mountains and Lake Ontario are not far away. So if you don’t mind cold weather and snow, Syracuse is a good place to retire cheap.
Akron, Ohio – Affordability score: 90.6%
Ohio cities dominate this list as well as the previously reviewed list. Akron has always been a blue-collar town with (necessarily) affordable housing. For decades, the tire industries supported Akron’s working population. With Detroit’s demise, Akron was pulled down as well. A rust-belt poster child, Akron was suffering and residents were moving away. As you might expect, crime is higher than average. The economy is showing signs of recovery now and the unemployment rate for 2012 has dropped under 9%. For those with jobs or retiring, it is a home shopper’s dream. The median 2BR home sales price is about $48,000, the lowest on this list. The cost of living is well below average and healthcare is adequate. Akron is a great cheap place to retire.
Cincinnati, Ohio – Affordability score: 90.2%
Yet another Ohio city earned a spot on this list. Cincinnati is quite a different city, however. It enjoys a diversified economy with major corporations offering above-average salaries. Unemployment is around 8%, the cost of living is a little below average, and the median 2BR home sales price is about $67,000. How is this possible? Modest Ohioans have enjoyed a less volatile housing market, yet there is a large volume of for-sale inventory. The rust belt has not attracted new residents for decades and Cincinnati’s crime rate is rather high. Medical centers are abundant, and the city has a lot to offer if you are careful in selecting a neighborhood for retirement. It is a particularly good place to find a part-time job while being semi-retired.
Les Christie has compiled a great list of affordable cities to buy a home. Each city highlighted in his article includes useful and interesting information. As we noted, most of these cities would be great for an affordable retirement home. Read Mr. Christie’s article here.