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

[SC Maintenance]

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!

Housing prices in Columbia SC -which as GON mentioned is likely the least desireable part of SC - are up 86% since 2014. So says zillow.

$600K is a lot of house in Columbia though - especially in 2014 - definitely way on the high end. Not a lot of jobs there that pay enough to afford it - so comparatively small market of buyers.

Columbia SC Home Prices & Home Values | Zillow

The typical home value of homes in Columbia SC is $226,753. Columbia SC home values have gone down 46.0% over the past year.

www.zillow.com

 

[97prizm]

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."

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

Montgomery, Alabama, ranks as the worst city for growth in home value since 1998.

www.cnbc.com

In Colorado make it 2-3 years. My neighborhood was in the 230-250's 3 years ago. Make it 600 plus now. My parents paid 90k in 1991.

 

[John105]

where is that?

Phila. PA

 

[CKN]

Phila. PA

Employment is one metric that affects property value. I'm seeing 5% unemployment. That's about average. So one assumes there are jobs?

 

[John105]

Employment is one metric that affects property value. I'm seeing 5% unemployment. That's about average. So one assumes there are jobs?

I know where I work we can’t hire anyone I just got a new teammate who’s in Houston. The guy in NY didn’t pass either the drug or background. So plenty of jobs.

Another oddity the Spring Hill Marriott near me is $200+ per night when in VA where real estate is expensive $94. Totally reversed.

 

[PandaBear]

The most important thing about home value is demand and supply. What influence that is:

1) income opportunity (not just low paying jobs but has to be middle income to high paying jobs) and this directly influence the school district and crime rate, so I'll not repeat that.

2) how much land is available for building new home vs tearing down old home to be rebuild one at a time. This is why a lot of places near water with "bay" is worth more than a big flatland in Texas for the same income because you already run out of land to build and your home is not going to drop to zero in value after the building deteriorate, it will worth something to a developer turning it into another newer home in the worst case. Sure you pay more when you buy them but it will worth more in the long run. It may be fine if you don't care but you can't compare apple to apple between Dallas and San Francisco for the same reason. People will lift up a Victorian, rebuild the foundation, save one wall and the roof and rebuild the other 3 walls, put it back together and call it a "remodel", while in Dallas people will sell the old home to lower and lower income crowd until it turn into a slum, and move on to new homes further out build on virgin lands. Which one will appreciate more?

3) a desirable place to live: between a town with the same amount of $200k jobs and the same amount of land, same number of population, people will pick the better climate, lower crime, younger community, more fun, less hostility, higher education population, more accessible to nature, newer infrastructure, etc.

Growth in value is usually inversely correlated to affordability, you can't have them both at the same time.

 

[John105]

The most important thing about home value is demand and supply. What influence that is:

1) income opportunity (not just low paying jobs but has to be middle income to high paying jobs) and this directly influence the school district and crime rate, so I'll not repeat that.

2) how much land is available for building new home vs tearing down old home to be rebuild one at a time. This is why a lot of places near water with "bay" is worth more than a big flatland in Texas for the same income because you already run out of land to build and your home is not going to drop to zero in value after the building deteriorate, it will worth something to a developer turning it into another newer home in the worst case. Sure you pay more when you buy them but it will worth more in the long run. It may be fine if you don't care but you can't compare apple to apple between Dallas and San Francisco for the same reason.

3) a desirable place to live: between a town with the same amount of $200k jobs and the same amount of land, same number of population, people will pick the better climate, lower crime, younger community, more fun, less hostility, higher education population, more accessible to nature, newer infrastructure, etc.

Growth in value is usually inversely correlated to affordability, you can't have them both at the same time.

What is interesting is that 17 years ago when I met my wife, for fun, we looked at what was my dream home. Asking back then was $1.4 mil, 3500 sq ft on a 1/5 acre lot. 2 car garage front loading new construction because not possible to side load on that small lot. One selling point back then was < $20k property tax. Since then the values went up to 1.6, down to 900k, and are currently at 1.4 mil. Also today the Hs is ranked 1150 nationally which is imho not good. This is exit 135 garden state parkway where tiny 1200 sq ft homes have been torn down and new McMansions built.

Only within the last 5 years have we seen this here in PA. I hope it continues as thst seemed to drive prices up. Our school is ranked 700’s which is ok. But if I had my way I would tear this old building down (and move to where the public Hs is ranked top 200’s

I’m old school the public school system matters. For example my buddy in his 800k home in st Augustine he says it’s a given the schools are no good and nobody cares they use private schools and factor in 25-35k per child into the cheap taxes

 

[PandaBear]

What is interesting is that 17 years ago when I met my wife, for fun, we looked at what was my dream home. Asking back then was $1.4 mil, 3500 sq ft on a 1/5 acre lot. 2 car garage front loading new construction because not possible to side load on that small lot. One selling point back then was < $20k property tax. Since then the values went up to 1.6, down to 900k, and are currently at 1.4 mil. Also today the Hs is ranked 1150 nationally which is imho not good. This is exit 135 garden state parkway where tiny 1200 sq ft homes have been torn down and new McMansions built.

Only within the last 5 years have we seen this here in PA. I hope it continues as thst seemed to drive prices up. Our school is ranked 700’s which is ok. But if I had my way I would tear this old building down (and move to where the public Hs is ranked top 200’s

I’m old school the public school system matters. For example my buddy in his 800k home in st Augustine he says it’s a given the schools are no good and nobody cares they use private schools and factor in 25-35k per child into the cheap taxes

The ultra wealthy won't care about school district as you mention, but their home value is not about school district but rather the local income (i.e. mostly bankers and surgeons live in this community). The upper middle class care and can afford, the middle middle class care and can't afford, the lower middle class know they can't afford and don't care, and the low income people don't care is how I understand school district.

IMO, it is really about the family rather than the resources. Look at one of our school district here, same funding same teacher and admins moving in between, we have an elementary school being 3 and right across the street we have a 10, the middle school they both end up with is a 7, and then they split off into different high schools and they went back to 9 vs 6. I think you can guess which one have more housewives and tutoring, which one has more 2 income parents in lower income, which one has more problems at home, which ones are grooming their kids since birth and which one has more "accidental pregnancy".

 

[Hillbilly Deluxe]

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.

100% Negative, Ghost Rider. 100% Negative.


I assure you there is NO ONE, NO ONE looking to move to Montgomery, AL and probably Macon GA where they firmly believe their home will increase in value. Yep, a house out in the east part of Montgomery *might* go up some, but I assure you the ridiculous amount of life-threatening crime you will endure while you are living in that area will remove years from your life due to stress. God forbid you are involved in violent crime there.

 

[Hillbilly Deluxe]

So you could buy cheap in those markets?

I grew up in Montgomery. Moved away when I was 24 in 1995. I made sure I didn't leave anything there I needed to go back and look for. Yes, I have been back many, many times but I would NEVER live there again. Probably wouldn't live in Prattville, Millbrook, Wetumpka or points directly south/southeast of Montgomery either. Other directions are out of the question, no need to discuss.

Montgomery is a very high crime area when compared per capita. On many, many emergency calls, the fire department/paramedics and ambulance companies will 'stage' in an area before approaching the scene. Staging is stopping, yes, stopping an emergency call, getting out of the trucks and donning ballistic vests and kevlar helmets at times. My brother works for one of the ambulance companies (he is not an active medic/EMT/ambulance driver/etc., he works an admin position).

For reasons some don't want to get into on this forum, I'll leave it there.

Back to "investment real estate" in Montgomery - There's probably 10,000 homes in Montgomery that could be bought for $20,000 or less. Probably another 10,000 that could be bought for $100,000 or less.

I finally convinced my mother to leave Montgomery in 2020. She lived in a fairly new home on the extreme east side. She paid $130k for the home, new in 2004? We sold it in August of 2020 for $170k. I had three offers in hand in less than 6 hours on a Sunday after listing it Sunday Morning. That same house books for about $200k today, but it's ok. Anyone who wants it can have it.

 

[PandaBear]

I finally convinced my mother to leave Montgomery in 2020. She lived in a fairly new home on the extreme east side. She paid $130k for the home, new in 2004? We sold it in August of 2020 for $170k. I had three offers in hand in less than 6 hours on a Sunday after listing it Sunday Morning. That same house books for about $200k today, but it's ok. Anyone who wants it can have it.

Compare to inflation it is probably break even at most. Compare to the rest of the real estate market as a whole in the US it is lousy and is a relative loss.

 

[PWMDMD]

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

Why not? It allows the most flexibility. If you're doing well then pay down the principal faster. If you fall on hard times then it doesn't impact cash flow as much. Even if you don't pay it down faster, what's wrong with owning your home by 70? That sounds like a great age to retire.

 

[Dave Hess]

I grew up in Montgomery. Moved away when I was 24 in 1995. I made sure I didn't leave anything there I needed to go back and look for. Yes, I have been back many, many times but I would NEVER live there again. Probably wouldn't live in Prattville, Millbrook, Wetumpka or points directly south/southeast of Montgomery either. Other directions are out of the question, no need to discuss.

Montgomery is a very high crime area when compared per capita. On many, many emergency calls, the fire department/paramedics and ambulance companies will 'stage' in an area before approaching the scene. Staging is stopping, yes, stopping an emergency call, getting out of the trucks and donning ballistic vests and kevlar helmets at times. My brother works for one of the ambulance companies (he is not an active medic/EMT/ambulance driver/etc., he works an admin position).

For reasons some don't want to get into on this forum, I'll leave it there.

Back to "investment real estate" in Montgomery - There's probably 10,000 homes in Montgomery that could be bought for $20,000 or less. Probably another 10,000 that could be bought for $100,000 or less.

I finally convinced my mother to leave Montgomery in 2020. She lived in a fairly new home on the extreme east side. She paid $130k for the home, new in 2004? We sold it in August of 2020 for $170k. I had three offers in hand in less than 6 hours on a Sunday after listing it Sunday Morning. That same house books for about $200k today, but it's ok. Anyone who wants it can have it.

You definitely don’t want to live in an area where the TV show First 48 films their murder investigations.

 

[PWMDMD]

I catch flak from time-to-time for living in Massachusetts, usually from people who live in less prosperous places with less stable economies. My taxes are reasonable, my schools and town well-funded, my standard of living is very high, and my business and home are relatively insulated from most economic downturns.

Those places on this list all sound like depressing places to live...no thank you.

 

[92saturnsl2]

Why not? It allows the most flexibility. If you're doing well then pay down the principal faster. If you fall on hard times then it doesn't impact cash flow as much. Even if you don't pay it down faster, what's wrong with owning your home by 70? That sounds like a great age to retire.

Exactly this, unless you have the means or can score a much lower interest rate on a 15 year loan.

The system has been rigged so that in most cases, for most families, a 30-year mortgage is essentially the only option. Banks like money (earning interest) and have very highly paid lobbyists that help sway policy.

If you were to research home prices/values vs household income going back 30+ years, you'll understand why a 15 year loan, which makes the most financial sense, is not longer attainable for most families.

Home value / equity has been a giant cash cow that propels the economy and keeps consumption high. Great for the folks who own a home, not so great for the ones looking to buy one.