These affordable housing markets offer great opportunities for buyers seeking budget-friendly homeownership.
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With high interest rates and rising home prices, it can seem like there’s no relief in sight for homebuyers. However, affordable homes can still be found in undervalued housing markets. Typically, smaller cities with stable economies and reasonably priced homes, undervalued markets become more appealing during inhospitable market conditions, like the ones that exist today.
Priced out of major metros, homebuyers flock to undervalued markets where their money goes much farther. Ahead, learn about ten of the most undervalued housing markets in 2024 with tips from a seasoned real estate expert.
What Is an Undervalued Housing Market?
“An undervalued housing market is one where homes or neighborhoods are expected to see a significant increase in value over the next few years,” Beatrice de Jong, California real estate broker with Beverly Hills Estates says. “This often occurs in areas where people, priced out of more expensive neighborhoods, move to similar, more affordable locations nearby, which may not yet seem as desirable.”
All of the cities on this list fit this description. Some are smaller cities within commuting distance of larger metros, while others are experiencing a resurgence due to revitalization efforts. Whatever the reason, all of these cities represent undervalued housing markets with a lot to offer homebuyers.
What Factors Impact the Cost of Houses?
Location
Size, age and condition of the house
Neighborhood comparables
Supply and demand
Interest rates
Condition of the neighborhood
Local economy and job market
Localized crime rates
State of nearby school districts
Ahead are some of the most undervalued and affordable housing markets in 2024.
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Detroit, Michigan
The median home listing price in Detroit is just $99,000, and the city offers the lowest mortgage payment-to-income ratio in the country.
While the city has gone through its share of struggles, it currently offers low unemployment rates and a burgeoning tech industry with major players like Google, Microsoft and LinkedIn. Add in big-city culture and diversity, and it’s no wonder Detroit tops the list as one of the most affordable and undervalued housing markets in the U.S. for 2024.
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Cleveland, Ohio
Cleveland remains affordable with a median home price of $143,000, but property values are on the rise due to low inventory and increased demand.
Cleveland has low unemployment rates and accelerated economic growth, particularly in tech industry jobs. Additionally, its future job growth is looking promising, as the city is investing in healthcare institutions and bio-science companies. Abundant recreation opportunities on and near Lake Erie round out this Midwest city’s appeal.
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Rochester, New York
With a median listing price of $184,900, Rochester is attracting many NYC transplants looking for more affordable living and a good quality of life. The University of Rochester and large medical centers are the primary employers in Rochester, contributing to low unemployment rates and stable incomes. Nearby recreation opportunities in the Finger Lakes region also make this mid-sized New York city a desirable and undervalued housing market.
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Montgomery, Alabama
The only southern city on the list, Montgomery has a median listing price of $205,900. Low real estate taxes of just $512 per year add to its affordability. Several major players in the aerospace industry provide good-paying jobs in the area, as does car manufacturer Hyundai. It’s an affordable city with room to grow and a warmer southern climate close to beautiful Gulf Coast beaches.
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Milwaukee, Wisconsin
Another Midwest city to make the list, Milwaukee has a median listing price of $219,900. Homebuyers here find below-average housing costs, as well as ample employment opportunities in the healthcare sector.
Located on the shores of Lake Michigan, Milwaukee also offers ample outdoor recreation opportunities. “Features such as clean parks, walking trails, or bodies of water add value to a neighborhood,” de Jong says.
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Baltimore, Maryland
While Baltimore may have a median listing price of $220,000, it is considerably more affordable than nearby Washington, DC. The city also has plenty of fixer-upper homes, offering a more accessible price range for homebuyers.
“Buying the newest home might not be the best investment,” de Jong says. “A better opportunity might be a slightly older home that needs updates, offering potential for value appreciation.” Baltimore also has a healthy economy based around education, health care and shipping.
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Buffalo, New York
This city in western New York has a median listing price of $220,000 and low tax rates. Residents of Buffalo enjoy a stable and diverse economy with employment opportunities in manufacturing, healthcare and technology.
For years, Buffalo has promoted initiatives to restore historic buildings and homes, encourage entrepreneurial businesses and bring manufacturing back to the city. This work has paid off as Buffalo is experiencing a resurgence, making it a great undervalued housing market.
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Memphis, Tennessee
The most affordable metro market in Tennessee, Memphis has a median home price of $225,000. With a median resident age of 34, Memphis has lots of nightlife, culture and a fantastic music scene. There’s also a stable economy with employers like FedEx, the state government and the U.S. government. House hunters can find a variety of home styles in Memphis, from historic to modern, and its location along the Mississippi River provides a scenic backdrop for recreational opportunities.
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Philadelphia, Pennsylvania
A large city with affordable homes, Philadelphia’s median listing price is $279,000. A strong economy centers around the University of Pennsylvania and Temple University, as well as 13 Fortune 500 companies. Close to New York City and Washington DC, a steady influx of homebuyers is drawn to the city’s walkable neighborhoods. “Being close to necessities like grocery stores, gyms, and workplaces drive up home prices, especially near major employers,” de Jong says.
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St. Louis, Missouri
With a low mortgage payment-to-income ratio, the median home price in St. Louis is $349,900. St. Louis’ Ladue School District regularly makes national top ten lists as one of the best school districts in the U.S. “Even for those without school-aged children, the quality of nearby schools can significantly affect property values,” de Jong says.
Home to the University of Missouri, other large employers include aviation, biotechnology and financial services companies.
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About the Expert
Beatrice de Jong is a real estate broker with Beverly Hills Estates in Los Angeles, California. Ms. de Jong previously worked for Open Listings as the Director of Residential Sales and OpenDoor as a Consumer Trends Analyst. She has over ten years experience in the real estate industry.
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