Well, it’s official: the American housing market is once again attractive to investors. Hedge funds and investment banks are sniffing around U.S. mortgages of late and buying up foreclosed homes by the thousands. The Economist even reports that the administrators for the now-defunct Lehman Brothers finally unloaded one of the company’s portfolios of apartments for a cool $6.5 billion.
However, as the U.S. housing market recovers, it’s clear that the recovery is not uniform. Since housing prices peaked in 2006 there have been numerous industry winners and losers. The old adage popularized by British real estate tycoon Lord Harold Samuel — “there are three things that matter in property: location, location, location” — has perhaps never been more true.
According to Coldwell Banker’s Home Listing Report — which ranks over 2,500 American housing markets — the average listing price nationally for a four-bedroom, two-bathroom home is $292,152. However, the difference in list price between the cheapest and most expensive housing markets was a whopping $1.6 million.
Housing Markets: Most Expensive Cities to Buy a Home
One of the biggest winners over the past several years has been the domestic technology market. According to the Home Listing Report, six of the top 10 most expensive housing markets in the U.S. are in Northern California — a short commute to Stanford University and the headquarters of Facebook, Google, Yahoo!, and Apple. Another four markets in Northern California also ranked in the top 20 — meaning half of the top 20 most expensive markets in the United States are in the San Francisco Bay Area.
1. Los Altos, CA — $1,706,688
2. Newport Beach, CA — $1,658,000
3. Saratoga, CA — $1,582,434
4. Menlo Park, CA — $1,506,909
5. Palo Alto, CA — $1,495,364
6. Los Gatos, CA — $1,444,214
7. Rye, NY — $1,312,250
8. Kailua, HI — $1,238,208
9. Carmel-by-the-Sea, CA — $1,232,167
10. San Carlos, CA — $1,230,880
11.Greenwich, CT — $1,200,525
12. Cupertino, CA — $1,151,145
13. San Francisco, CA — $1,132,086
14. Weston, MA — $1,105,692
15. Belmont, CA — $1,098,777
16. Boulder, CO — $1,084,183
17. Orono, MN — $1,070,203
18. Mercer Island, WA — $1,059,411
19. Darien, CT — $1,056,933
20. Redwood City, CA — $1,010,394
Housing Markets: Most Affordable Cities to Buy a Home
Despite surviving the automotive industry crisis following the global financial meltdown in 2008, real estate in the Rust Belt remains incredibly cheap. Three of top 20 most affordable housing markets are in the Detroit area, and another two are in Cleveland. Some Rust Belt housing markets are so affordable that one could purchase 28 four-bedroom, two-bathroom homes in Redford, MI, for less than one house in Los Altos, CA. Remarkably cheap, considering the greater Detroit area still ranks as the nation’s 14th largest metropolitan economy.
1. Redford, MI — $60,490
2. College Park, GA — $62,080
3. Detroit, MI — $65,155
4. Cleveland, OH — $70,066
5. Poinciana, FL — $76,341
6. Hastings, FL — 78,840
7. Jonesboro, GA — $79,686
8. Park Forest, IL — $81,107
9. Augusta, GA — $83,936
10. Johnstown, PA — 84,173
11. Cleveland Heights, OH — $84,535
12. Saginaw, MI — $85,345
13. Fort Pierce, FL — $89,292
14. Country Club Hill, IL — $90,788
15. Irvington, NJ — $92,264
16. Lehigh Acres, FL — $92,819
17. Terrell, TX — $96,329
18. Warren, MI — $96,349
19. Ellenwood, GA — $97,850
20. Maricopa, AZ — $97,886
Sources:
The Big Long: A new generation of investors is betting on America’s housing market. The Economist.
Safire, William (June 26, 2009). Location, Location, Location. The New York Times.
Home Listing Report. Coldwell Banker.
Florida, Richard (May 15, 2012). How Detroit Is Rising. The Atlantic Cities.
