Where Investors Can Get the Most House for the Money
Well, Toto may not be in Kansas anymore, but Dorothy might want to reconsider as she and the dog can get a lot more digs there than most other places right now. A report released by Porch earlier this month said the sunflower state is slightly ahead of the pack when it comes to states where you can get the most house for the money.
The home improvement site researchers used price, affordability, home size, and change in value data from Zillow, Realtor.com, and the US Census Bureau to create a composite score for each state and nearly 50 major subway areas.
Kansas easily topped the list, followed by Mississippi, Indiana, Arkansas, North Dakota, Oklahoma, Wyoming, Kentucky, Alabama, and Utah.
“Especially absent from the list are coastal states like California and Massachusetts, where the price per square foot and home payments as a percentage of income are much higher than the rest of the country,” notes Porch.
Indy races to the top among the big metros
Residential real estate investors – whether they’re looking for a flip or a rental – obviously need to be a little more detailed than the state they’re looking at, and the Porch piece got you covered there, too.
Porch tops Indianapolis on the list of major metros, followed by Kansas City, Cleveland, Raleigh, Salt Lake City, Charlotte, Birmingham, Houston, Dallas-Fort Worth and Oklahoma City.
At the bottom of the list at number 46 is San Jose, California. Here’s how much the top and bottom of the list are different: the median square footage for a home sale in Indianapolis was 2,308 and the price was $ 238,562, or $ 113.70 per square foot. The monthly payment as a percentage of household income was 18.9%
For San Jose, if you make $ 724.82 per square foot for $ 1,196,565, you get a 1,696 square foot home and mortgage that is 40.1% of the median monthly income for that market.
As an investor, the average monthly income doesn’t seem as relevant to the mortgage, but that high price also means you are evaluating a potentially significant chunk of the rental market outside of your scope as well as the size of the potential buying pool if you want to buy and sell fast .
The medium-sized and smaller metros lean well inland
The top 10 for medium-sized metros are:
- Provo, Utah
- Ogden, Utah
- Fayetteville, North Carolina
- Huntsville, Alabama
- York, Pennsylvania
- Wichita, Kansas
- Mobil, Alabama
- Flint, Michigan
- Fort Wayne, Indiana
- Boise City, Idaho
For small metros the numbers one to 10 are:
- Longview, Texas
- East Stroudsburg, Pennsylvania
- Jackson, Tennessee
- Binghamton, New York
- Wichita Falls, Texas
- Decatur, Illinois
- Decatur, Alabama
- Bay City, Michigan
- Jefferson City, Missouri
- Logan, Idaho
The bottom line of Millionacres
It’s interesting to note that these lists regularly feature markets that are regularly reported to be among the hottest in the country, such as Charlotte and Raleigh in North Carolina, Salt Lake City in Utah, and Boise in Idaho.
While they are actually seeing price spikes – 13.4% last year and a projected 16.0% for Salt Lake City included in the Porch report – they still represent relative values versus more expensive coastal markets, especially for the larger homes that people have wish The pandemic is looking for more space in and around them.