Housing in 2018 is a hot topic. In most major cities, rent is skyrocketing through the roof—and home prices aren’t much better. In a city like San Francisco, Seattle, or Denver with low inventory and high demand, finding an affordable home is a pipe dream.
To make matters worse, many experts claim we’re not far away from another housing crisis or recession. For someone looking to buy their first home, that’s a scary proposition. There’s nothing worse than buying an expensive home, only to immediately see it plummet in value—and leave you underwater on the mortgage.
If you’re looking to buy in 2018, consider looking in a buyer’s market. Houses in these cities are more reasonably priced, and less likely to see a massive drop in value if the housing bubble pops.
What’s Ahead:
What is a buyer’s market?
A buyer’s market is a housing market where the homes sell more slowly compared to the rest of the country. Housing prices also increase at a slower rate, and sometimes even decrease from year to year. This term can also describe conditions where the supply exceeds the demand, like in a city where job growth is slow and industries are dying.
Why you should purchase a home in a buyer’s market
Purchasing a home in a buyer’s market can be good if you want to put down roots on a bargain property. But if you plan to move in the next few years, a house in a buyer’s market can be a gamble. It will take longer to sell and you’ll have fewer competing offers (as long as it stays a buyer’s market).
The best reason to buy in a slow market is if you plan to stay there for five to 10 years. If you purchase a home in a buyer’s market and only stay a couple years, you might find it hard to sell and recoup your closing costs. If you’re willing to stay, you should be able to at least break even.
Read below to see our list of the top cities that are still a buyer’s market in 2018.
Camden, New Jersey
The city of Camden is located only 15 minutes away from Philadelphia—but it’s in a whole other world when it comes to housing affordability. According to Zillow, the average list price per square foot is $48, compared to $145 in the Philadelphia metro area. The median price of homes in Camden is only $60,000.
Many residents of Camden take advantage of low housing costs while working in Philadelphia, getting the best of both worlds with only a slightly longer commute. Commuters can avoid Philly traffic by using the PATCO rapid transit system.
Residents who live in Camden also get the benefits of being near Philadelphia without paying Philly housing costs.
A quick note: While Camden has low housing costs, there’s a reason. Camden has been known to be one of the poorest and most dangerous cities in the U.S. BUT, the city’s reputation is definitely getting better. Crime rates have gone down significantly, and the police force has nearly doubled in size.
Las Vegas, Nevada
The worldwide home of gambling, Las Vegas has been immortalized in films for crazy bachelor party weekends, impressive casino heists, and shady mafia activity. But residents of Las Vegas know something that visitors don’t: The housing market is incredibly stable.
Las Vegas is still 13 percent away from its peak housing prices, which means the market isn’t as inflated as the rest of the country.
Homebuyers who are interested in Vegas know there’s more to the city than the Strip. Plenty of outdoors recreational activities are available just outside the city and the state has no income tax. People interested in the arts and cultural activities can find them, with a vibrant community of chefs and artists and a relatively close proximity to Los Angeles.
Memphis, Tennessee
Housing costs in Memphis have gone up 8.3 percent in the last year, though the median home price is still below the national average. Zillow also predicts a -0.1 percent decrease in housing costs next year. Like other cities on this list, Memphis also boasts a lack of state income tax.
Tennessee is one of the most affordable states for housing, with the exception of Nashville which is slowly becoming one of the hotter markets in the country. That makes Memphis a better deal for people who want affordable housing along with the Mid-South climate.
New home builds are popular and affordable in the Delta city, a good option for homeowners who don’t want to deal with older homes. Memphis citizens enjoy world-class barbeque, a temperate climate and state-of-the-art zoo.
Minneapolis, Minnesota
People unfamiliar with the city of Minneapolis might think of one thing before they visit: the cold. But once they come, they’ll fall in love with the cultural hotbed that is the Twin Cities.
They’ll also love the current buyer’s market. The median price of sold homes in 2017 was $247,800, which is higher than the current national average. However, the market in the Minneapolis metro area has slowed down, which means we’re unlikely to see higher prices than what’s currently available.
Residents who live in Prince’s home city take advantage of winter sports activities, a burgeoning food scene and rooting for the Vikings. The city also has an extensive series of walkways connecting downtown buildings for residents worried about the cold.
Orlando, Florida
The home of Disney World, Universal Studios, Sea World, and Legoland, Orlando is known as the theme park capital of the world. But it’s not just a place to go to on vacation—it’s also a great place to buy a home. The city still hasn’t fully recovered from the Great Recession, so homes there are priced lower than other Florida cities like Miami.
The average home price in Orlando in 2017 was $224,000, which is higher than the national home price of $199,2000. However, prices in Orlando have yet to reach their pre-recession peak of $264,000.
Orlando has a lot to offer prospective homebuyers, even if they’re not interested in visiting a theme park every week. Florida has no income tax, sunny days year-round and more beaches than any other US state. Plus, friends and family will always want to come visit you.
Getting a mortgage in a buyer’s market
With these cities below, there will be room to negotiate the price of the home, but what about your mortgage rate? Is there an advantage to getting a mortgage rate in a buyer’s market?
Sort of. You can’t necessarily negotiate your mortgage rate since it’s determined mostly by credit, but rates differ from state to state and are often lower in a buyer’s market.
Mortgage rates also vary by lender, so when you’re ready to start shopping for a mortgage, check out our partner LendingTree.
Summary
Buying a house you can afford is completely possible in these five cities. Plus, they offer boisterous night scenes and tons of amenities all for half the cost of expensive cities.
