Chances are that, if you're living in a big metro area on either coast in America, you're paying a lot of money for a little bit of space. Typically, this is done for the glamour of the city itself; after all, if one wishes to be an actor or some kind of performer, then the only real choices available are in New York or California. For everyone else, luckily (or unluckily) there are cities in America where the housing markets haven't quite recovered from the 2006-07 real estate bubble, and prices are valued at below fundamental asking prices.
Trulia, a real estate website dedicated to both having classified advertisements for renting space and for studying the housing market as a whole, released a study earlier this year that showed the most overvalued housing prices were, as expected, in California. They also found some of the more affordable housing options, and some might actually surprise.
1. Detroit, MI: There is no surprise for the top spot. Detroit declared bankruptcy last year, and as previously reported, it is having trouble spurring both investment in its economy and expansion of industry. Foreclosures have skyrocketed in the city, and many houses are abandoned or the residences of squatters with nowhere else to go. That is why some houses are being sold for the surprising asking price of $1, and why many wealthy Chinese investors are buying the properties in bulk.
2. Cleveland, OH (and Ohio as a whole, really): Five other cities were estimated by Forbes Magazine as being extremely affordable as well, but in Cleveland, home prices are valued at 18% below fundamental value. By some metrics, Cleveland is a dying city: its population is decreasing, but in contrast, per capita income is increasing along with overall income.
3. Tampa, FL (and the region around it): Compared to its (somewhat distant) neighbors Miami and Fort Lauderdale, Tampa comes in as extremely affordable (along with Palm Bay, Titusville, and Melbourne). This is likely because of the city's proclivity for storm damage and flooding during hurricane season, something that isn't exactly the average homebuyer's dream.
4. Memphis, TN: The birthplace of Elvis and rock 'n' roll, Memphis brags its low spot on the foreclosures list with pride. Cost of living is significantly lower: whereas a budget of just over $100,000 gets you a tiny closet of an apartment in Manhattan, in Memphis (and the surrounding area) one can afford a four-bedroom house with all the trimmings.
5. Pittsburgh, PA: The location of the film The Dark Knight Rises, it was recently rated as one of the most affordable cities in the world. Compared to a city like Detroit or Tampa, it is also reasonably safe, as it has become a hub of health care and Heinz products since its glory days as a steel producer.
