The 15 worst places to buy a home if you want it to grow in value

[GON]

I find it a surprise when the article states house prices have doubled over the past 25 years. I see many places in the USA where house prices have double over the past four years.

But the author's point is valid. Buying real estate in a place with decline in population and poor business climate, and poor weather is not such a great move if one is wanting to have appreciation in their home value.

Also, I believe Montgomery Alabama or Macon Georgia to be a much better investment when compared to any location in Illinois, the article used a 25 year trend, current trends are not captured.

"While most home prices have doubled in the last 25 years, property owners in some cities have struggled to gain value — especially in Illinois.

Out of the 400 U.S. metropolitan areas ranked by home-price growth since 1998, six Illinois cities are in the bottom 15, according to a recent SmartAsset study."


https://www.cnbc.com/2023/04/07/worst-places-to-buy-a-home-if-you-want-it-to-grow-in-value.html

 

[totegoat]

None of those places are being considered here.

 

[John105]

Surprised we're not on the list.

 

[walterjay]

So you could buy cheap in those markets?

 

[GON]

So you could buy cheap in those markets?

WJ,

I am checking a lot of markets, have not found any cheap market when using a home in desirable shape/design is required.

What the article is suggesting, is if you buy a 500k home in Rockford, IL today, and a 500k home in Columbia, SC today, in ten years the Rockford home might be worth 510k, the Columbia home might be worth 900k. All just speculation, but with Illinois have a decline in population for ten consecutive years, it is hard to see projected appreciation when compared to a place like Columbia, SC. And Columbia is no crown jewel.

 

[John105]

WJ,

I am checking a lot of markets, have not found any cheap market when using a home in desirable shape/design is required.

What the article is suggesting, is if you buy a 500k home in Rockford, IL today, and a 500k home in Columbia, SC today, in ten years the Rockford home might be worth 510k, the Columbia home might be worth 900k. All just speculation, but with Illinois have a decline in population for ten consecutive years, it is hard to see projected appreciation when compared to a place like Columbia, SC. And Columbia is no crown jewel.

When does reality factor in? My buddy bought a brand new McMansion in Columbia SC and took a bath when they moved to Lakeland FLA. The other thing I was thinking, who takes out a 30 year mortgage at age 40? Better to time a roulette wheel!

 

[GON]

Joh

When does reality factor in? My buddy bought a brand new McMansion in Columbia SC and took a bath when they moved to Lakeland FLA. The other thing I was thinking, who takes out a 30 year mortgage at age 40? Better to time a roulette wheel!

John,

Dates your buddy purchased and sold the McMansion? Price he paid and sold? And for note, Volkswagen is building a brand-new vehicle plant just three miles from the Columbia, SC city limits. People got their clocks clean that purchased in Phoenix, AZ in 2005 and sold in 2010. Yet those that purchased in Phoenix in 2005 have likely doubled/ tripled there money the if they sold their Phoenix home today. If one purchased a home in Rockford, IL in 2005, likely if they could sell, ithe sale more likely than not would be at or near a loss today.

A new trend I am hearing is for older folks just before retirement, to purchase a home with the smallest down payment as possible. And if they pass, the heirs have the choice of "buying the home", or just let it foreclose- quit claim to the lender. of course, a proper trust has to be set up to protect other inheritable estate assets.

 

[John105]

Joh

John,

Dates your buddy purchased and sold the McMansion? Price he paid and sold? And for note, Volkswagen is building a brand-new vehicle plant just three miles from the Columbia, SC city limits. People got their clocks clean that purchased in Phoenix, AZ in 2005 and sold in 2010. Yet those that purchased in Phoenix in 2005 have likely doubled/ tripled there money of they sold their Phoenix home today. If one purchased a home in Rockford, IL in 2005, likely if they could sell, it would be at or near a loss today.

A new trend I am hearing is for older folks just before retirement, to purchase a home with the smallest down payment as possible. And if they pass, the heirs have the choice of "buying the home", or just let it foreclose- quit claim to the lender. of course, a proper trust has to be set up to protect other inheritable estate assets.

I remember him saying they stole the house for just under $500k, all the homes were in the mid 600's. This had to have been around 2014 or so, and they sold only a year later for a loss. Brand new home. I remember telling him I'm not even sure if I'll "EVER" live in a 4000k sq ft home, probably not. He told me you're not missing one thing. Better to live in your paid off house than do what we're doing.

I won't lie, I'd love to live in a McMansion and tired of hearing, but you can, you're rich!

 

[92saturnsl2]

I received a reasonably lucrative job offer at a company in Alsip, IL (Chicago area) 3-4 years back. I was really tempted to take it and it would have opened a lot of doors for me career-wise.. But my mind kept saying. CHICAGO! are you crazy? Decided to stay put in KY. Probably best decision I ever made. Home values are riding rapidly where I live, and the whole area is seeing tremendous economic development. Whatever extra money I would have made working in Chicago would have been stale money-- where do you go from there if the area isn't growing?

 

[Astro14]

I remember him saying they stole the house for just under $500k, all the homes were in the mid 600's. This had to have been around 2014 or so, and they sold only a year later for a loss. Brand new home. I remember telling him I'm not even sure if I'll "EVER" live in a 4000k sq ft home, probably not. He told me you're not missing one thing. Better to live in your paid off house than do what we're doing.

Owning for just a year nearly ensures the loss. You’re unlikely to even make enough appreciation to cover the realtor’s fees. Given normal up/down fluctuation in any market, one year is a really awful time to own a home, in most markets.

 

[supton]

The other thing I was thinking, who takes out a 30 year mortgage at age 40? Better to time a roulette wheel!

I elected to. Am hoping the wife returns to the workforce soon and we can accelerate our payment at that time. 30 year for the flexibility, with the hopes of maybe paying off in 20 if we play our cards right. I figure, once I tip past 55 or so, those last 10 years to retirement, that money saved won't grow as much, so at that time I will slowly increase what I put towards my mortgage (while decreasing what I save to retirement, if necessary). Once I hit 60 I'll cut my retirement savings rate as low as necessary to pay off by 65--if my retirement isn't well funded at 60, it won't ever be.

Alternatively, I just work until 70. Not high on my list of things I want to do, would much rather retire today, but sometimes one has to juggle. While having a desk job means I'm at higher risk of dropping dead from lack of being in shape, at the same time I'm less likely to suffer a work place injury, or suffer any injury that would prevent me from working. [And if I do drop dead, life insurance will easily pay off the house for my wife.]

I suppose I could always downsize later. Not high on my list either! but I really wanted out of my prior house, and this new one had enough space that I could build my WFH office, where I actually do WFH more than not. Not saying it was an investment in my career, but it sure helped.

But it definitely was weighing heavily on my mind, signing up for 30 years at age 42, thinking, gee what if I do have to work until I'm 72???

 

[Dave Hess]

Some areas of Florida keeps going up while hot markets in California and Texas slowly declining.

Big bubble in Florida getting bigger daily.

 

[GON]

Some areas of Florida keeps going up while hot markets in California and Texas slowly declining.

Big bubble in Florida getting bigger daily.

DH,

And do what for the newly domiciled Florida homeowners.... return to NY, IL, PA, OH, NJ, CT, etc? I suspect these newly domiciled homeowners in FL are not leaving to return to their old stopping grounds. And I am not so sure new stopping grounds in other states are amply available.

California is safe. Homebuyers in California are very willing to have three generations live in their single family home. And many have lots of family. Texas always has the exposure of "unlimited" land for new home construction, so I can see some risk in TX. But as I have written about, nobody is losing money in residential real estate in 95% of the USA today.

And for the record, I purchased my first home in Royal Palm Beach, FL in 1984. 1040 SQ FT new construction starter home, 3 bedrooms, 2 baths, on 1.acre, $54,000 (if memory serves me right- I could be off by $2k).

 

[ecotourist]

And for the record, I purchased my first home in Royal Palm Beach, FL in 1984. 1040 SQ FT new construction starter home, 3 bedrooms, 2 baths, on 1.acre, $54,000 (if memory serves me right- I could be off by $2k).

In the area I grew up, a normal house was 850 - 900 sg. ft., surprisingly often made from 2 shacks pulled together. That's where everyone lived. People raised families in them and considered themselves as having nice houses.

We built our first house, 1150 sq ft with 3 bedrooms and 2 baths. It cost +/- $55,000 in 1979. [We paid it off in 5 years and though we've moved several times into bigger and better houses, haven't had a mortgage payment since]. One of the older ladies from my home town came for a visit. As she walked through the door of that first house she said, "and this is your house." It all depends on what you think is nice.

She and her husband spent most of their married lives in a settler's era log house. And raised a number of neighbourhood kids who needed somewhere to live too.

 

[John105]

California is safe. Homebuyers in California are very willing to have three generations live in their single family home.

When I was in college, I got a 32 yo roommate from Long Island who had no idea how to wash his own clothes, let alone save money for his own future. Imho that was “strange” back then but quite common today. If parents are ok with kids never getting out into the real world and standing on their own two feet I suppose more power to them.

My wife’s cousin suddenly is 46 and has never had a full time job. He’s the one whom last week when we hosted a reception for my son, took 10 take home boxes home and even posted his score on social media. I had posted reminded me of ratso in Midnight Cowboy when he steals the salami.

 

[ET16]

The wild card going forward is going to be climate. Heat and lack of water in the south could start to push more people north.

 

[GON]

The wild card going forward is going to be climate. Heat and lack of water in the south could start to push more people north.

Many people, all of who are much smarter than me, concur with your theory.

I do not concur, as the states in the south and west grow in population, these states will have increasing and overwhelming political clout. This clout will get federal statues of water revised to what I speculate is the painless transfer of water from water rich areas to the South and West.

 

[JeffKeryk]

I elected to. Am hoping the wife returns to the workforce soon and we can accelerate our payment at that time. 30 year for the flexibility, with the hopes of maybe paying off in 20 if we play our cards right. I figure, once I tip past 55 or so, those last 10 years to retirement, that money saved won't grow as much, so at that time I will slowly increase what I put towards my mortgage (while decreasing what I save to retirement, if necessary). Once I hit 60 I'll cut my retirement savings rate as low as necessary to pay off by 65--if my retirement isn't well funded at 60, it won't ever be.

Alternatively, I just work until 70. Not high on my list of things I want to do, would much rather retire today, but sometimes one has to juggle. While having a desk job means I'm at higher risk of dropping dead from lack of being in shape, at the same time I'm less likely to suffer a work place injury, or suffer any injury that would prevent me from working. [And if I do drop dead, life insurance will easily pay off the house for my wife.]

I suppose I could always downsize later. Not high on my list either! but I really wanted out of my prior house, and this new one had enough space that I could build my WFH office, where I actually do WFH more than not. Not saying it was an investment in my career, but it sure helped.

But it definitely was weighing heavily on my mind, signing up for 30 years at age 42, thinking, gee what if I do have to work until I'm 72???

Contrats on your property. Keep at those payments; always make something extra into your mortgage payment. Having a home free and clear is a great feeling.

 

[CT Rob]

House on my street sold in 2021 for over 400k . The house is worth on a good day MAYBE 200k. It still looks the same now as it did over 30yrs ago. Insanity . Sure hope the new suckers save all their pennies

 

[CKN]

Surprised we're not on the list.

where is that?