Yahoo Finance Housing Market 2023: Avoid Buying a Home in These 10 Places If You Want It To Gain Value
Ideally, buying a house will have a dual benefit: first by providing a place to live, and second by becoming a winning investment. Fortunately for most U.S. homeowners, home values have consistently gone up through the years — though some markets have far outperformed others.
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Between 1991 and 2022, the average annual home price increase was 4.3%, according to a Credit Karma report that cited Federal Housing Finance Agency data. Since 2000, the average rate was 4.7% a year. And from 2012 to 2022, the average rate was 7.7%. However, during a single 12-month period ending in April 2022, average home values nationally rose a whopping 18.8%, helped by a red-hot housing market. Home prices and values in most U.S. markets have continued to push higher in 2023.
Your home’s appreciation rate depends on numerous factors, with location being right there at the top. For example, average home values in Florida soared by nearly 30% during a single quarter last year, Credit Karma reported, while those in North Dakota gained about 10% during the same time frame.
No matter how the overall U.S. housing market performs in the coming years, you will do a lot better buying a home in some areas of the country than others. A recent home analysis by SmartAsset that compared home value data for 400 metropolitan areas between 1998 and 2022 found that Texas outpaced the rest of the country in terms of home value growth and stability, while Michigan consistently ranked near the bottom.
If you want to know how much difference location can make in home values, consider that from 1998 to 2022, average home prices in the Texas metro area of Austin-Round Rock-Georgetown rose 354%. In contrast, prices rose only about 72% in Flint, Michigan, during the same period.
Sometimes you don’t have much choice about where to buy a home because of work or family obligations. But when you do have flexibility, it pays to do your research and figure where your money is best spent.
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If you are in the market to buy a home now, following are 10 places you should avoid if you want to see your home value rise. The rankings are based on SmartAsset’s analysis and take into consideration historic home value increases as well as the “historic rate of home loss value,” which reflects the possibility of experiencing a 5% price decline or more within a decade after buying.
1. Flint, Michigan: 45% historic rate of home-loss value
2. Monroe, Michigan: 44%
3. Detroit-Dearborn-Livonia, Michigan: 44%
4. Saginaw, Michigan: 40%
5. East Stroudsburg, Pennsylvania: 45%
6. Rockford, Illinois: 39%
7. Bay City, Michigan: 40%
8. Kokomo, Indiana: 39%
9. Warren-Troy-Farmington Hills, Michigan: 42%
10. Jackson, Michigan: 42%
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This article originally appeared on GOBankingRates.com: Housing Market 2023: Avoid Buying a Home in These 10 Places If You Want It To Gain Value
