TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1501025
MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 58 J O U R N A L June 2023 to extend their home search to a 30-mile dis- tance around their city of choice have a much better chance of finding the right home. The most expensive cities are on the East and West coasts, but East Coast residents have many more affordable suburbs to choose from. Looking at the biggest percentage differ- ences between prices in the main cities and those in the corresponding suburbs, it's ob- vious that East Coast homebuyers are faring better: With only a few exceptions, the first 100 suburbs that have the most significant price difference compared to the main city are all on the East Coast. Compared to Miami or New York City, the price per square foot of living space in Medley, Florida; Emerson, New Jersey; Lodi, New Jersey; or Mount Vernon, New York, is 65% and 62% lower than the price in the city. In fact, there are 11 suburbs where one square foot of space is significantly cheaper than in the city: Medley, Florida; Emerson, New Jersey; Lodi, New Jersey; Mount Vernon, New York; Huntingtown, Maryland; Waldorf, Maryland; Moonachie, New Jersey; Boulevard Park, Washington; Lawrence, Massachusetts; Pas- saic, New Jersey; and Paterson, New Jersey, all have prices per square foot between 60% and 65% lower than the median price per square foot in their respective cities. But, while it's true that the majority of suburbs (603) flaunt home prices lower than in the city, other suburbs give these expensive urban hubs a run for their money. For example, in Sullivan's Island, a suburb near Charleston, South Carolina, the price per square foot is $1,400, 385% higher than the median price in the city, which is below $300. This may have been the biggest price difference of all the suburbs included in our analysis, but 17 more suburbs are absolute kryptonite for the average homebuyer, as prices here are between 100% and 212% high- er than in the city. In Salt Lake City, 100% of suburbs within 30 miles are more affordable than the core City New York City and Washington, D.C., are close behind, with 98% and 97%, respectively, of their suburbs having much more afford- able prices per square foot of space. In some of the most desirable cities in the nation, the outlook is grim. Inflation and higher costs of living are affecting everyone, but the current financial conditions are simply bludgeoning home seekers. However, suburbs may still provide the silver lining that all aspiring homebuyers are looking for. Given their extended freedom to move and relocate in this brand new era of remote work, home seekers could expand their search radius, so they can really start looking and stop compromising. The place where homebuyers can do that most freely is Salt Lake City, where all the suburbs close to Utah's capital have more affordable home prices than the main city. The median home price in Salt Lake is $540,000, while the median price per square foot is $345. Depending on how much space they want and need, buyers might have to dish out a lot of money. Fortunately, they have plenty of other options: With prices per square foot ranging between $192 and $295, all the suburbs that are closest to Salt Lake City are more affordable. Moving to the East Coast, New York City, and Washington, D.C., come in second and third, respectively. Here, an impressive 98% and 97% of all the suburbs within a 30-mile driving distance are more affordable. Specifically, in New York, 85 of the 87 nearby suburbs are (far) more affordable than the city, with only Rye, New York, and Hoboken, New Jersey, being 12% and 36% more expen- sive than the city. The same goes for Washington, D.C.: In 76 suburbs, the price per square foot of living space is much lower than in the city. That said, Bethesda, Maryland, and Chevy Chase, Maryland are the only two exceptions: Buyers in the capital are paying around $500 per square foot, whereas home seekers focusing on these two suburbs are looking at medians of $510 and $542, respectively. Rounding out the top five list of cities with the most affordable suburbs are Boston and Honolulu. Buyers looking for homes in Lawrence, Massachusetts, could pay 60% (or $387) less for each square foot of space com- pared to the city. Meanwhile, in Hawaii, it's the buyers willing to move to Wahiawa who will feel the biggest difference: The median price per square foot here is 36% (or $265) lower than in the main city. At the other end of the spectrum, San Jose, California, and Charleston, South Carolina, have the fewest affordable suburbs. Only 32% and 41% of all their suburbs cater to the needs of cash-strapped buyers. Likewise, in San Francisco, Oakland, and Sacramento, the shares of affordable suburbs within a 30 miles driving distance is slightly higher, but just barely: A little more than half of the more easily reachable suburbs here have lower prices per square foot than homes for sale in the main city. This side of the ranking is dominated by expensive cities on the West Coast, while the most expensive markets on the East Coast have many more affordable nearby suburbs. "Given how expensive some of these urban hubs are, any renter and potential homebuyer wouldn't be foolish for thinking they need to move to another state to find something more affordable."