As home prices have surged over the past few years, many buyers have been chasing affordability. They’ve sought out smaller homes, fixer-uppers, and abodes in farther-out neighborhoods and suburbs to save some dough. And now, with the novel coronavirus sickening the world’s economy, resulting in tens of millions of furloughs and job losses, affordability seems more important than ever.
Trouble is, just because an area boasts reasonably priced homes, it doesn’t mean buyers can snag those deals. Especially now.
The number of homes for sale has plummeted since the COVID-19 pandemic took hold on U.S. soil, making it tougher than ever for buyers to find a home in their price range. Sellers have pulled listings off the market at a rapid clip, as many didn’t want to sell or accept a lower price during a public health and financial crisis.
So with the economy struggling and a lack of listings, where can buyers look for that sweet spot of affordability and plenty of homes to choose from? Well, they can start by heading to Des Moines, IA, or maybe to the Southeast.
Des Moines was one of just six metropolitan areas that boasted a decent inventory of affordably priced homes, according to a recent realtor.com® analysis. (Metros include the main city and surrounding towns, suburbs, and smaller cities.) The median home price in the Midwestern city was nearly $270,000 in April. That’s nearly 19% less than the national median of $320,000.
(Realtor.com’s economics team included only metropolitan areas that were more affordable for residents earning local salaries. These real estate markets also needed at least 10 active home listings per 1,000 households. Only the 100 largest metros were included in the analysis.)
“These are predominantly Southern areas where we tend to see fewer people living on top of each other and more opportunities for builders to keep up with housing demand,” says realtor.com Chief Economist Danielle Hale. “Des Moines regularly appears at the top of our home affordability lists.”
Des Moines was followed by Baton Rouge, LA, with a $249,000 median home price; Atlanta, at $325,000; Virginia Beach, VA, at $316,000; Jacksonville, FL, at $311,500; and Lakeland, FL, at $235,000. These are mostly areas that weren’t as affected by COVID-19 in April as other parts of the country. (Atlanta’s median price is higher than the national one, but the analysis is based on local incomes.)
On the other side of the equation are the most affordable metros—where buyers will have a harder time finding properties for sale. There were only two to four listings per 1,000 households in each of these markets.
Nationally, the coronavirus pandemic has exacerbated an already severe housing shortage. In April, the number of new listings was down 45% year over year. That’s due to sellers taking homes off the market or holding off on listing their abodes. Many don’t want to go through the selling and moving processes, and have potential buyers and movers inside their homes, during a public health crisis. Others are worried they’ll be leaving money on the table by selling their residences during an economic downturn.
That’s likely to make finding the right home at the right price challenging—even for the most motivated buyers.
“Inventory has been low and has continued to be low nationwide because builders have not kept up with the number of buyers in the market,” says Hale. “The areas that have seen the worst inventory shortages are a lot of Rust Belt cities and West Coast areas where builders have really struggled to put up new housing.”
Buffalo, NY, led the pack of the more affordable real estate markets with a dearth of inventory. The median home price in the city in northern New York state was just $219,950 in April. Too bad there were just 2.5 homes on the market per 1,000 households.
Lastly, there were the metros where there are plenty of homes to go around—if you’re rolling in dough. They all have more than 10 home listings per 1,000 households.
Bridgeport, CT, which includes the pricey suburbs of Fairfield County, had the most inventory. But with a median home price of about $722,000 in April it was well out of reach for many Americans, especially those struggling financially right now.