There's good news for Americans thinking about buying a new house. Sure, the real estate market continues to struggle. But the median sale price for a single-family home is 22% lower than it was at its 2006 peak, and would-be buyers who've saved up a nest egg can get themselves some real bargains.
Some experts are still bullish on a housing recovery. But meanwhile, many American families have been unable to get financing as banks tighten lending standards, or are purposefully waiting out the market. That means there's pent-up demand, says Dr. Richard Green, director of the Lusk Center for Real Estate at the University of Southern California, "but you can still get about 33% more house than you could at the peak."
The bargains are better in some cities than others. A dollar buys a lot more in cities that were particularly hard-hit by the bursting real estate bubble--and you could spend the same on a tiny apartment in New York than you might for a five-bedroom manor in Florida.
In order to compare what you can get for your money across the country, we asked Realtor.com to look at 10 large U.S. cities and find a typical $300,000 single-family home in each. We chose $300,000 because it's a price that, depending on where you live, either barely scratches the low end of the market, or soars above the median price. In most cities, buyers can find a respectable house at that price--but the homes' features, size and proximity to the city center vary dramatically depending on geography.
In Miami, where record foreclosures and the collapse of a construction-dependent economy has decimated jobs, even the most speculative of investors are wary of buying new property. But with home prices well below their peak, deals abound. For $300,000 you'd be able to buy the largest house on our list, a pristine 3,449-square-foot, five-bedroom villa built in a sprawling subdivision in 2005, near the height of Miami's building frenzy.
In contrast, the same amount of money in Seattle, you'd have to settle for a simple three-bedroom one-third that size.
Washington, D.C., has a robust real estate market, at least compared with most other metros. The median sales price for a single-family home in the second quarter of 2010 was $331,600, according to the National Association of Realtors, so $300,000 will only buy you a modest stucco three-bedroom in a far-flung neighborhood. In Chicago, where houses sell for a median $203,800, you'll have more options, including a pleasant two-story with the same number of bedrooms, but double the bathrooms, and located in the city's "Bungalow Belt."
|San Diego, California|
By far the tiniest dwelling on our list is a 576-square-foot one-bedroom San Diego home that's in danger of foreclosure. But San Diegans might consider this potential short-sale with an upgraded kitchen, fireplace and tidy backyard a deal. While prices have fallen far from their peak in the city, they are still well above the national average--the median home price is $392,600.
You can get a lot more for your money in Houston, where $300,000 will buy a 3,193 square foot villa with 4 bedrooms and a hot tub. Lush palmetto trees frame the front door and a vaulted ceiling greets you on entry. In Houston, prices have always been more realistic. "Price drops are correlated with how far out of whack prices got in the first place," says Green. "Houston never went up very much, so it didn't have far to fall."
In Atlanta $300,000 is more than double the median sale price. You can live quite well there for the money, in a charming brick two-bedroom built in 1938 in the city's historic Grant Park neighborhood. Wainscoting and crown moldings deck the interior, and the lot includes a large, shady backyard.
You'll also get a historic house for that price in Boston, but one that's far more run-down. The Victorian fixer-upper has potential, but the siding and interior details need work, and the rooms feel small and dark.
Whether a few hundred grand will get you a sprawling great room and southern exposure or a dingy box on the outskirts of town, the most important consideration for home buyers should always be their personal circumstances, says Green. Viewing a home as an investment and not just a place to live is a dangerous move, since most buyers can't time or predict the vagaries of the housing market. "If you're buying it thinking ‘I'll probably make some money on it,' you're probably already buying it for the wrong reason."
What $300,000 Buys In Homes Across America
Square Feet: 1,241
Description: 1930s brick bungalow with hardwood floors, central air conditioning and a library. Keller Williams Realty Peachtree Road has the listing.
Square Feet: 1,446
Description: Craftsman style stone-and-siding home with kitchen upgrades, oak floors and fireplace. Coldwell Banker Residential Brokerage Towson has the listing.
Square Feet: 1,989
Description: Traditional row house on a corner lot with hardwood floors, a fireplace and finished basement. Coldwell Banker Residential Mortgage Milton has the listing.
Square Feet: 1,731
Description: Georgian brick home with ceramic-tiled kitchen, oak staircase and expansive patio and backyard. Century 21 Pro-Team has the listing.
Square Feet: 3,449
Description: Tract home built just before the bust in a sunny subdivision. Williams Realty Premier Properties has the listing.