Following the Great Recession, housing markets have not had enough supply for buyers throughout the U.S., and it’s frustrating for many first-time homebuyers struggling to keep up with rapidly rising home values.
Fortunately, it looks like some markets are starting to calm down.
While home values continue to climb, they appear to be slowing compared to previous years, and the median listing price is remaining steady – and in some cases dropping.
In May, real estate information company Trulia identified markets in the U.S. where the median home listing price either fell or stalled in March 2018 compared to the same time the year before. Places like Austin, Texas, saw a decrease in median listing price by 3.4 percent, Houston had a mere 0.4 percent increase in median listing price, and Sarasota, Florida, saw just a 0.7 percent increase.
The listing price doesn’t capture the ultimate sale price, but it can be an indicator that markets are finally starting to edge toward the buyer’s benefit. The reasons for decreasing listing prices vary from market to market, but more construction and completion of new homes, additional options outside the city center and a relaxing of the market at high-end prices appears to be easing tensions in some housing markets.
Here’s a snapshot of three markets where homebuyers may see some relief as they tour houses and condos while searching for their next home.
Sarasota: High-Price Buyers Have Room
Trulia shows slowed increases in listing price, but according to Greg Owens, a local Realtor and president of the Realtor Association of Sarasota and Manatee, the relief is selective. For homes valued less than $500,000, it’s reasonable to expect multiple offers on a property and for it to move quickly.
“Depending on the price range you’re in, you may have to jump a little faster through the hoop,” Owens says.
Properties above the half-million price point, however, are a different story. Homes above $500,000 have more like eight months of inventory on the market, Owens says.
Even with the tough seller’s market in the lower price range, Sarasota is more buyer-friendly than other Florida metro areas. Even as the third fastest-growing metro area in the U.S. due to net migration (between 2012 and 2016, according to the U.S. Census Bureau), home sale price increases have been below the state average increase, Owens says. “That bodes well for our area, for people to come here,” he explains.
The truth is you can get a less expensive home in the Sarasota area as long as you’re willing to sacrifice the luxuries many people move to coastal Florida for. So if you live in the North Point area or east, closer to cattle farms and orange groves rather than the water and beaches, Owens says affordability is far less of a struggle.
“If you don’t mind driving 30 or 40 minutes to the beach, you can find some more affordable housing,” he says.
Houston: Building Activity Makes Room for More Buyers
According to data from the Houston Association of Realtors, the market had 3.6 months of supply for the month of April (six months of supply is a balanced market), slightly less than a year earlier. While that inventory is inching downward toward a seller’s market, Houston is currently in a balanced market cycle and is also on par with the national average for months of inventory, according to the National Association of Realtors.
Key to Houston’s market, however, is its surging construction activity. In 2017, the Houston metro area saw 42,395 authorized permits for residential construction, according to the U.S. Census Bureau. In the first four months of 2018, 17,417 additional authorizations took place for residential construction.
The metro area’s severe damage from Hurricane Harvey is a primary reason for the spike in construction, but the building activity will likely lead to more movement in the market. Construction is necessary to ensure existing homes that were damaged can be repaired and not undergo further damage over time, as well as build new residences to replace those that can’t be salvaged. But the construction does more than just help replenish what was lost to Hurricane Harvey – a constantly growing metro area with new housing options helps new residents in the area see that the city isn’t held back by the damage it sustained.
But Houston’s building activity is a distant second in terms of Texas metro areas experiencing a construction boom: The Dallas-Fort Worth area saw 22,870 authorized housing units in the first four months of 2018. Trulia’s report points to relaxing median listing prices not just in Houston and Dallas-Fort Worth, but San Antonio and Austin as well.
Austin: Seek Outside the City Center
The rapidly expanding capital of Texas has been in the midst of a population boom ever since tech companies from Silicon Valley pointed to Austin as a more affordable, easily accessible place to locate new offices following the recession. As a result, Austin has grown by 10.25 percent between 2012 and 2016 due to net migration alone, according to the U.S. Census Bureau.
Because of the interest from relocating professionals, it’s no surprise that the Austin market has been becoming an increasingly tough area for first-time homebuyers. In April, the Austin metro area saw a 5 percent year-over-year increase in median sale price to $315,000, according to the Austin Board of Realtors.
Buyers in the Austin area can still expect tough competition for homes in the hottest city neighborhoods, but don’t give up hope. “There is inventory on the market,” says Jeff Plotkin, a Texas-licensed Realtor, attorney and certified public accountant and vice president of Habitat Hunters Inc. in Austin. “We are resourceful in finding people properties that meet their needs, so long as their pricing expectations and locations are realistic.”
The secret to buying in Austin? Consider buying just outside of Austin. Residential real estate has 2.4 months of inventory on the market in the greater metro area, as opposed to just 1.9 months of inventory inside the city limits. “A lot of people have turned to the suburban areas such as Round Rock, Manor, Buda, Cedar Park because they can get more house for their money,” Plotkin says.
Based on historic housing data from the Real Estate Center at Texas A&M University, the Austin market is coming up on its peak season for available properties, typically running from July to September. The current local inventory implies there will be fewer properties on the market compared to last year, but it’s simply a matter of seeing what becomes available.
Plotkin notes there’s ample construction throughout the area for all types of property, from single-family homes to commercial buildings. More than 9,900 units of housing were authorized for construction in the first four months of 2018, according to the U.S. Census Bureau, with as many as 26,700 authorized in 2017. Austin isn’t building as quickly as Houston or Dallas, but it’s certainly working to provide some relief to all the demand.
Find an affordable place to call home.
Your ability to be financially comfortable is a key part of deciding where you want to live. Based on a survey of more than 2,000 U.S. residents on the importance of various factors in determining where to live, U.S. News weighted value at 25% – making it one of the key metrics used to calculate the Best Places to Live. To pinpoint the most affordable places on the list, we looked at what portion of the median annual household income goes toward the average cost to own or rent a home, plus the typical cost of utilities and taxes.25. Charlotte, North Carolina
25. Charlotte, North Carolina
Best Places 2019 Rank: 20
Metro Population: 2,427,024
Median Annual Salary: $50,150
Income Spent on Living Expenses: 21.77%
Charlotte takes the No. 25 spot on the list, with residents spending just 21.77% of their household income on housing expenses. At $50,150, the median annual salary for Charlotte residents just about matches the national average of $50,620.24. St. Louis
24. St. Louis
Best Places 2019 Rank: 81
Metro Population: 2,804,998
Median Annual Salary: $49,180
Income Spent on Living Expenses: 21.53%
Missouri’s largest metro area offers more affordability compared with other places in the U.S. of the same size. For instance, Baltimore and Tampa, Florida, can’t match the 21.53% cost of living compared to household income that St. Louis offers.23. Little Rock, Arkansas
23. Little Rock, Arkansas
Best Places 2019 Rank: 88
Metro Population: 730,346
Median Annual Salary: $43,780
Income Spent on Living Expenses: 21.52%
The capital of Arkansas is the 23rd-most affordable place to live on our list, with a blended annual household income, which includes household income for both renters and homeowners, of $55,911. After housing costs are covered, Little Rock residents typically keep more than 78% of their income to dedicate to other expenses.22. Syracuse, New York
22. Syracuse, New York
(Tony Shi Photography/Getty Images)
Best Places 2019 Rank: 54
Metro Population: 659,262
Median Annual Salary: $49,850
Income Spent on Living Expenses: 21.51%
This upstate New York metro area is a far more affordable living option compared to New York City, one of the most expensive places to live in the U.S. Syracuse is also one of the few metro areas that's not located in Middle America in the 25 Best Affordable Places to Live list.21. Minneapolis-St. Paul
21. Minneapolis-St. Paul
Best Places 2019 Rank: 6
Metro Population: 3,526,149
Median Annual Salary: $56,030
Income Spent on Living Expenses: 21.5%
Minneapolis-St. Paul is the most populous metro area on the 25 Best Affordable Places to Live list. Not only are residents spending a smaller portion of their household income on housing – just 21.5% – they’re also bringing home more money. The median annual salary is $56,030.20. Lexington-Fayette, Kentucky
20. Lexington-Fayette, Kentucky
Best Places 2019 Rank: 29
Metro Population: 500,689
Median Annual Salary: $43,270
Income Spent on Living Expenses: 21.49%
Lexington-Fayette has deep roots in the equestrian and agriculture industries, with plenty of farmland just outside the city centers. This helps keep the metro area’s cost of living low, at just 21.49% of the household income.19. Raleigh and Durham, North Carolina
19. Raleigh and Durham, North Carolina
Best Places 2019 Rank: 10
Metro Population: 1,824,266
Median Annual Salary: $53,788
Income Spent on Living Expenses: 21.47%
Referred to as the Research Triangle on account of the plethora of research companies and major universities based in the area – including Duke University, the University of North Carolina—Chapel Hill and North Carolina State University – Raleigh and Durham enjoy a relatively low cost of living. Residents spend just 21.47% of their household income on living costs.18. Tulsa, Oklahoma
18. Tulsa, Oklahoma
Best Places 2019 Rank: 83
Metro Population: 977,869
Median Annual Salary: $45,260
Income Spent on Living Expenses: 21.45%
Residents of the Tulsa area spend just 21.45% of the median household income on the cost of living. The overall cost of owning a home in Tulsa is low as well: The median home price is just $149,000, according to Zillow, which is well below the national average of $227,025.17. Greenville, South Carolina
17. Greenville, South Carolina
Best Places 2019 Rank: 22
Metro Population: 872,463
Median Annual Salary: $43,230
Income Spent on Living Expenses: 21.44%
Ranking No. 22 on the overall Best Places to Live list, Greenville enjoys a low cost of living with residents spending just 21.44% of the median household income on housing. And a steadily growing number of people are able to benefit from this low cost of living: Greenville's population grew by 4.9% due to net migration between 2013 and 2017, according to the U.S. Census Bureau.16. Kansas City, Missouri
16. Kansas City, Missouri
Best Places 2019 Rank: 49
Metro Population: 2,088,830
Median Annual Salary: $49,460
Income Spent on Living Expenses: 21.43%
This metro area that straddles both Missouri and Kansas is home to more than 2 million residents, but it still maintains greater affordability than most major metro areas. Kansas City residents dedicate just 21.43% of their household income to the cost of living.15. Wichita, Kansas
15. Wichita, Kansas
Best Places 2019 Rank: 79
Metro Population: 642,339
Median Annual Salary: $43,880
Income Spent on Living Expenses: 21.42%
While there are more than 600,000 residents in this Kansas metro area, Wichita maintains a small-town feel – with a low cost of living to match. Residents use just 25.88% of their household income to cover rent or mortgage payments, utilities and taxes.14. Omaha, Nebraska
14. Omaha, Nebraska
Best Places 2019 Rank: 32
Metro Population: 914,190
Median Annual Salary: $47,660
Income Spent on Living Expenses: 21.29%
With a median annual salary of $47,660, Omaha takes the No. 14 spot. The largest metro area in Nebraska, which ranked a bit higher at No. 8 last year, has seen a slight increase in the cost of living. Still, residents spend just 21.29% of their household income on housing.13. Youngstown, Ohio
13. Youngstown, Ohio
(Getty Stock Images)
Best Places 2019 Rank: 97
Metro Population: 548,821
Median Annual Salary: $41,360
Income Spent on Living Expenses: 21.18%
With a little more than a half-million residents, the Youngstown metro area has a cost of living that requires 21.18% of the median household income. The median home price for the metro area is low as well, at just $86,850, more than $140,000 below the national average.12. Louisville, Kentucky
12. Louisville, Kentucky
(Bob Stefko/Getty Images)
Best Places 2019 Rank: 64
Metro Population: 1,278,203
Median Annual Salary: $45,100
Income Spent on Living Expenses: 21.11%
As the No. 15 Best Affordable Place to Live in 2018, Louisville has climbed three spots to rank 12th on the list this year. With a median annual salary of $45,100, Louisville residents spend 21.11% of their household income on living expenses.11. Buffalo, New York
11. Buffalo, New York
Best Places 2019 Rank: 52
Metro Population: 1,136,670
Median Annual Salary: $48,180
Income Spent on Living Expenses: 21.11%
Beating Louisville by a ten-thousandth of a percent for the portion of income that goes toward housing, Buffalo is the second upstate New York metro area to make the top 25. Residents in the Buffalo area benefit from a low cost of living, with just 21.11% of the median household income spent on living expenses.10. Cincinnati
Best Places 2019 Rank: 39
Metro Population: 2,156,723
Median Annual Salary: $48,890
Income Spent on Living Expenses: 21%
Cincinnati residents spend slightly less than Buffalonians on housing costs. The typical cost of living is 21% of the median household income.9. Baton Rouge, Louisiana
9. Baton Rouge, Louisiana
Best Places 2019 Rank: 109
Metro Population: 828,741
Median Annual Salary: $44,500
Income Spent on Living Expenses: 20.79%
It may be ranked No. 109 on the overall Best Places to Live list, but Baton Rouge ranks high when it comes to affordability. Baton Rouge residents spend just 20.79% of their income on housing costs.8. Lafayette, Louisiana
8. Lafayette, Louisiana
Best Places 2019 Rank: 96
Metro Population: 487,633
Median Annual Salary: $39,940
Income Spent on Living Expenses: 20.76%
The second Louisiana metro area on the Best Affordable Places to Live list, Lafayette has a cost of living of just 20.76% of the median household income. The low cost of living helps balance out the area's lower median annual salary, which at $39,940 is more than $10,000 below the national average.7. Indianapolis
Best Places 2019 Rank: 38
Metro Population: 1,989,032
Median Annual Salary: $48,030
Income Spent on Living Expenses: 20.72%
Indianapolis is one of two Indiana metro area to crack the top 10 of the Best Affordable Places to Live list. Indianapolis residents spend just 20.72% of their household income on rent, mortgage payments, utilities and taxes.6. Grand Rapids, Michigan
6. Grand Rapids, Michigan
Best Places 2019 Rank: 13
Metro Population: 1,039,182
Median Annual Salary: $44,770
Income Spent on Living Expenses: 20.68%
Money goes further in Grand Rapids than most parts of the U.S. While the median annual salary is below the national average of $50,620, metro area residents spend just 20.68% of the median household income on living expenses.5. Pittsburgh
Best Places 2019 Rank: 50
Metro Population: 2,348,143
Median Annual Salary: $48,580
Income Spent on Living Expenses: 20.51%
Located in the western part of Pennsylvania, Pittsburgh enjoys a more affordable cost of living than Philadelphia to the east. Residents of the Steel City and its surrounding area spend just 20.51% of their household income on rent or mortgage payments and utilities.4. Fayetteville, Arkansas
4. Fayetteville, Arkansas
Best Places 2019 Rank: 4
Metro Population: 514,166
Median Annual Salary: $45,830
Income Spent on Living Expenses: 20.44%
Fayetteville continues to grow in population – having increased by 6.94% between 2013 and 2017 due to net migration alone – but the area maintains a low cost of living. Residents spend just one-fifth of their household income on housing costs.3. Des Moines, Iowa
3. Des Moines, Iowa
Best Places 2019 Rank: 5
Metro Population: 623,113
Median Annual Salary: $50,600
Income Spent on Living Expenses: 20.11%
Des Moines has long been known for its low cost of living. After taking the top spot in the Best Affordable Places to Live in the U.S. ranking in 2016 and 2017, the capital of Iowa holds onto its No. 3 spot from last year. Des Moines residents spend just 20.11% of the median annual household income on living costs.2. Fort Wayne, Indiana
2. Fort Wayne, Indiana
Best Places 2019 Rank: 40
Metro Population: 429,060
Median Annual Salary: $43,590
Income Spent on Living Expenses: 19.57%
Residents of Fort Wayne, one of the least-populated metro areas in the Best Places to Live ranking with under 500,000 residents, benefit from spending less on housing. The cost of living in Fort Wayne is just 19.57% of the median household income.1. Huntsville, Alabama
1. Huntsville, Alabama
Best Places 2019 Rank: 11
Metro Population: 444,908
Median Annual Salary: $53,600
Income Spent on Living Expenses: 19.3%
Huntsville is the most affordable place to live out of the 125 most populous metro areas in the U.S. for the second year in a row. An above-average median annual salary and low cost of living mean Huntsville residents are keeping more money in their pockets to devote to other things. Just 19.3% of the median household income in Huntsville goes toward housing costs.The Best Affordable Places to Live in the U.S. include:
The Best Affordable Places to Live in the U.S. include:
- Huntsville, Alabama
- Fort Wayne, Indiana
- Des Moines, Iowa
- Fayetteville, Arkansas
- Grand Rapids, Michigan
- Lafayette, Louisiana
- Baton Rouge, Louisiana
- Buffalo, New York
- Louisville, Kentucky
- Youngstown, Ohio
- Omaha, Nebraska
- Wichita, Kansas
- Kansas City, Missouri
- Greenville, South Carolina
- Tulsa, Oklahoma
- Raleigh and Durham, North Carolina
- Lexington-Fayette, Kentucky
- Minneapolis-St. Paul
- Syracuse, New York
- Little Rock, Arkansas
- St. Louis
- Charlotte, North Carolina
She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.
Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at email@example.com.
Devon Thorsby | June 5, 2019
Homeowners should not fret, as long as they're prepared for the possibility of a downturn.