Just how high can home prices go in America’s biggest cities? That’s the question many prospective buyers are asking as they wait (and wait) on the sidelines of the nation’s top housing markets—watching for that magical time when crazy-high price tags get slashed and they can sprint toward the homeownership end zone.
That day hasn’t come yet. Sure, the pace of home price growth nationally has slowed a bit in recent months. However, we’re still far from an overall buyer’s market, with prices continuing to move upward in most places. And that climb has been the most pronounced in the big cities. The median home price in urban areas is up 36.1% over the past three years*, compared with a 24% jump in suburban areas and 18.8% in rural communities. Put simply: Big cities are just as desirable as ever, and are still engulfed in bidding wars.
But don’t give up and sign that new rental lease just yet! There are neighborhoods in the country’s biggest cities where home buyers have the upper hand—places where prices are affordable, plenty of homes are for sale, crime is relatively low, and the work commute is reasonable. The realtor.com data team set out to find these urban unicorns.
“Buyers are getting creative to make the dream of homeownership become a reality, while also dealing with the reality of their budget,” says Danielle Hale, chief economist for realtor.com®. “They’re looking for homes that might be smaller or maybe require some work, or to neighborhoods that are less expensive that might be their second pick.”
“Usually what you want are not the established neighborhoods,” agrees Andres Carbacho-Burgos, a senior economist focused on housing at Moody’s Analytics.
To come up with our list, we analyzed the ZIP codes in the nation’s 10 largest cities. We measured median prices, days on market, and the share of homes for sale. And we included only ZIP codes with at least 12 homes on the market in any given month.
To ensure these were places where folks would actually want to live, we eliminated neighborhoods where commuting to the city center by car or public transit takes more than an hour in rush hour, and we knocked off places with high crime rates. In two markets (Dallas and Miami), our picks actually have higher home prices than the overall city. The reason: Many neighborhoods in these places have high crime rates and were removed from our rankings.
OK? Let’s take a tour of the secret (and safe!) big-city neighborhoods that won’t break the bank.
For the past few years, Queens has been touting itself as the “new Brooklyn” as prices in that ultratrendy borough have gone nuts. There are still a few refuges here where folks can find reasonably priced homes, relative to the rest of New York City, and enjoy top-notch ethnic restaurants, craft cocktails, and plenty of fun things to do.
Enter the Ditmars-Steinway section of multicultural Astoria. The area is easily accessible to Manhattan and boasts plenty of condos, co-ops, townhomes, and modest—albeit pricey—multifamily brick homes. The latter offers buyers a chance to rent out the other housing units to help with their mortgage payments. (Realtor.com looked only at single-family homes in our analysis.)
“Proximity to Manhattan is one of the main reasons people like Astoria,” says Paul Halvatzis, a real estate agent with Amorelli Realty. “You can be in midtown in four or five subway stops, and the area is very safe.”
Let’s get back to that cuisine: The neighborhood was traditionally known for its Greek, Italian, and Middle Eastern cuisine, but it’s since seen an explosion of international eateries open in recent years. Foodies are crazy about the place.
It’s so hard to find a true bargain in Los Angeles, more buyers are exploring areas that are a bit off the beaten path. Sylmar is a more rural neighborhood on the edge of L.A., about 45 minutes from downtown. It sits on the foothills of the San Gabriel Mountains and Angeles National Forest. And buyers there can still score some great deals.
“There’s a lot of different types of homes here,” says local Realtor Mel Wilson. “You can get a two-bedroom condo in the $300,000 range or a single-family with property for horses or animals starting in the $500,000s.”
The number of homes on the market is lower now than it’s traditionally been, but more inventory has become available recently.
After a long run of bidding wars, escalating home prices, and an exodus of residents to the low-tax suburbs of nearby Indiana, Chicago’s housing market is starting to come back down to earth. And bargain-savvy city dwellers are beginning to look in the southwestern neighborhood of Ashburn.
The neighborhood boasts plenty of brick bungalows and ranches and is close to public transit and highways. Plus, it’s just a 30-minute drive from downtown. It’s getting an upgrade with beautification projects, lots of home renovations, and a slew of new independently owned stores, cafes, and restaurants.
“This neighborhood has great potential for growth and future price appreciation,” says Nick Libert, a Realtor with Exit Strategy Realty. “It’s one of the most affordable places in the city.”
4. Houston, TX
Those looking for a Lone Star deal should check out Meadowbrook, a 35-minute rush-hour drive…