If you’re feeling frozen out of real estate by high prices and interest rates, you might consider some of these alternatives.
There are many reasons people may want to move out of an expensive city and into a small town. Some crave the laid-back and homey lifestyle while others are trying to get into the housing market with a more affordable property that they’ll trade in once it grows in equity.
In its annual list of the most attractive small towns for those looking to buy, Realtor.com identified a number of communities that could be attractive for both investments and those interested in changing up their lifestyle.
As with many such round-ups of the best places for real estate investment, the Midwest offers more possibilities than towns within driving distance of major coastal cities — while a celebrity enclave outside L.A. may be small, the average house can still top several million.
“The Midwest is well-represented thanks to its affordable home prices and abundance of small towns,” Danielle Hale, chief economist for Realtor.com, said in a statement. “And the few areas outside of the Midwest are both scenic and historic.”
Where Are The People Moving?
One such place is Elk City, Oklahoma — the 12,000-person town in the western part of the state has a median list price of $144,000 and, in the last two years since the pandemic, saw an influx of people move there during.
A Midwestern enclave, Minnesota’s Albert Lea, is 90 minutes from Minneapolis but has significantly lower real estate – $144,950 for a median home compared to the latter’s $325,000.
The most expensive small town on the list is Spirit Lake in Iowa which, at a median price of $289,900, is still a far cry from the country’s urban centers.
Madison, Indiana ($215,450) and Berlin, New Hampshire ($212,250) are two towns that are known for their natural beauty and quality of life.
Both have also seen an influx of out-of-town and out-of-state residents settle in during the pandemic.
“Located between Louisville, KY, and Cincinnati, the area is full of rolling hills and limestone bluffs with many historic trails, as well as Michigan Road (the first road commissioned by the state in 1826),” Realtor.com wrote of Madison.
What Is It About The Midwest?
In this list of ten towns, only two are located outside the Midwest area — the above-mentioned Berlin and Sweetwater, Texas.
The 11,000-person town is located smack in the middle of the state and has a median listing price of $119,450. The downside is that it is not particularly close to any major city but, for those looking to get away from the hubbub, that could actually be a benefit.
“There have been countless headlines about a mass migration to Texas since the start of the pandemic but Sweetwater, about two hours east of Odessa, TX, has remained relatively hidden from newcomers,” reads Realtor.com. “That might soon change—at least when folks discover this college town and “Wind Turbine Capital of Texas” that offers plenty to do with far cheaper home prices.”
The focus on the Midwest indicates indicates certain factors that are not surprising to anyone who tracks the real estate market: coastal city prices are pushing many out of owning a home altogether while the Midwest offers lots of places that one can buy on a relatively modest income.
As some experts talk of a bubble, time will tell which of these places will skyrocket and which will not have the kind of growth that some out-of-town investors hope to see.
“What [homeowners] have found is a whole new world of opportunities—places with cheaper and more spacious real estate, picture-perfect town squares, walkable downtowns, good jobs, easy access to outdoor activities, and even plenty of restaurants, bars, and entertainment options,” Realtor.com says.