Yahoo Finance 8 Best and Worst States To Buy Property in August 2024, According to Housing Market Experts
As of Q1 2024, the average sales price of homes sold in the United States was $513,100, according to the Federal Reserve Bank of St. Louis. Housing prices across the board have been on a steady rise over the past 60 years or so, though certain periods have seen dips. Even these have always corrected themselves after a few years, though.
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While the national average sales price is just over half a million dollars, there are many states where residential real estate costs much less — or more — than that. Along with this, some states are better than others for purchasing property due to things like climate, supply and demand, insurance costs and other cost-of-living factors.
For those who are thinking about purchasing property but are flexible about location, it’s good to be prepared. After all, nobody likes surprises that cut into their returns or quality of life.
Here are the best and worst states to buy property in August 2024, according to experts and data from Zillow, Missouri Economic Research and Information Center (MERIC), and Insurance.com.
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5 Best States To Buy Property in August 2024
Maryland
Average home sales price: $421,804
State’s overall cost of living index: 116.2
Average cost of homeowners insurance ($400,000 coverage): $2,131 annually
Kateryna Odarchenko, a licensed Realtor with Long & Foster Real Estate, said Maryland is one of the best states to buy property this August.
“Even during the global financial crisis, property prices didn’t fall significantly, and there were fewer foreclosures,” she said.
In Greenbelt, there are also plans for a new FBI headquarters, which will bring in something like 7,000 employees. Job opportunities in the government sector are also still abundant, according to Odarchenko. This also has allowed for more flexible work arrangements for many, meaning they can live in other parts of the state — with more affordable housing — while still pursuing potentially lucrative careers.
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Plus, Maryland has the edge on nearby D.C.
“Washington, D.C., has its own set of problems, leading many people to choose to live in Virginia or Maryland instead,” Odarchenko said.
Texas
Average home sales price: $306,756
State’s overall cost of living index: 92.4
Average cost of homeowners insurance ($400,000 coverage): $4,643 annually
Homeowners insurance might be on the higher side in Texas, but the overall cost of living is lower than the national average. Of course, this can vary based on which city you’re looking at — places like Austin, for example, are on the pricier side. But you can still find some very reasonable prices on property this summer.
The state also has a lot to offer in terms of economic opportunities.
“Texas continues to be a strong market for property buyers due to its robust economic growth, business-friendly environment and relatively affordable cost of living,” said Dennis Shirshikov, a housing market expert and head of growth at real estate company Summer. “Cities like Austin and Dallas offer a blend of high-tech job opportunities and attractive living conditions.”
Nevada
Average home sales price: $440,473
State’s overall cost of living index: 102.7
Average cost of homeowners insurance ($400,000 coverage): $1,853 annually
“I would recommend looking at states with strong job growth and net migration, like Nevada,” said Daniel Cabrera, a real estate investor with Sell My House Fast SA TX. “Home values have consistently risen and interest rates remain low.”
Cabrera specifically pointed out Las Vegas as one city to buy property for investment purposes. “Las Vegas provides opportunities for cash flow through rentals and appreciation.”
Arizona
Average home sales price: $434,865
State’s overall cost of living index: 110.5
Average cost of homeowners insurance ($400,000 coverage): $3,063 annually
Arizona also has a lot of potential for real estate investors, Cabrera said. Depending on the city, of course, properties there tend to appreciate at a reasonable rate and bring in cash flow through rentals.
Between the average sales price and homeowners insurance being on the lower side, residential properties can also be a solid personal investment.
North Carolina
Average home sales price: $335,974
State’s overall cost of living index: 98.5
Average cost of homeowners insurance ($400,000 coverage): $3,398 annually
Near the coast, there’s a greater chance of hurricanes and environmental damages from them — something that has led to higher homeowners insurance premiums. But if you travel inward to the Piedmont or mountainous regions, prices start to drop a little. Combine that with an overall relatively low cost of living, and North Carolina is a great state to consider buying property.
There’s also the opportunity for economic growth.
“North Carolina, especially areas like Raleigh and Charlotte, offers a balanced mix of affordability, economic growth and quality of life,” Shirshikov said.
For example, the Research Triangle Park in Raleigh is a major employer of tech and health professionals.
3 Worst States To Buy Property in August 2024
California
Average home sales price: $786,938
State’s overall cost of living index: 145
Average cost of homeowners insurance ($400,000 coverage): $1,772 annually
Some things, like the average cost of homeowners insurance, might be cheaper in California. But the overall cost of living may deter some homebuyers. The high cost of housing doesn’t help either.
“California continues to pose challenges for property buyers due to exorbitant prices and high cost of living,” Shirshikov said. “Additionally, the state’s stringent regulations and high taxes further complicate property investment.”
Some cities, like San Francisco and Los Angeles, are even more out of reach for the average person — as well as for many individual investors.
Florida
Average home sales price: $399,944
State’s overall cost of living index: 103.1
Average cost of homeowners insurance ($400,000 coverage): $4,984 annually
“Though I do not hold a license in this state, I consider Florida to be one of the least attractive states for property purchase right now,” Odarchenko said. “During the COVID-19 period, there was an oversupply of property, and the demand has dropped.”
Home prices are still reasonable compared to many other parts of the country. So, for those who want to enjoy the year-round sunshine — with a bit of sporadic rain — and have a relatively lower cost of living, some areas of Florida might be worth checking out.
New York
Average home sales price: $742,930
State’s overall cost of living index: 123.1
Average cost of homeowners insurance ($400,000 coverage): $2,349 annually
“New York is another challenging market,” Shirshikov said. “The ongoing shift towards remote work has led to a softening of demand for high-priced urban living. Manhattan, for instance, has seen a decline in residential real estate prices, and high property taxes combined with a high cost of living make it a less attractive option for many buyers.”
Key Regions To Buy — and To Avoid
Every state has its pros and cons when it comes to buying property. Even if one particular state is more expensive or faces more environmental disasters than another, certain cities within that state could still be worth it. It all comes down to personal preference and needs.
That said, Derrick Barker, the CEO of Nectar, had a couple of broad suggestions for states to buy or avoid buying property this August. One such area to buy, he said, would be the Sunbelt states, where there’s a lot of supply.
“Right now, there is pressure on rents here as a lot of units come to market,” Barker said. “However, these markets are fundamentally strong and the new construction pipeline is not getting refilled. I would look to buy properties here, particularly where cap rates have adjusted higher and rent assumptions are more modest.”
On the other hand, Midwestern states could be among the worst to buy — with caveats.
“Right now, this is where there is strength and stability in terms of rents and values,” Barker said. “This is good, particularly if you invested here in the past several years. And if you have good deal flow and market knowledge, there are very strong markets and deals to be had here.
“However, I believe that long term, the markets with stronger population and job growth will win out, particularly since new starts are so low and not keeping up with demand, which will continue to build.”
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