Homebuyers are always looking to get a deal and make a smart investment. Though some might expect that the bigger the house the bigger the price tag, the reality is that no square foot or dollar is created equal around the country. Whether you're relocating for a job, putting down roots for a family, buying a dream home for retirement or simply looking for a change of scenery, consider where you can get the biggest bang for your buck.
Javier Vivas, manager of economic research for Realtor.com, says: "Property values are influenced by a number of factors, including a market's overall cost of living, employment, job growth and housing inventory. What you can buy for $500,000 in Dayton, Ohio, is very different than what you can buy in San Francisco, where the cost of living is higher, the job market is on fire and housing is in short supply.
"In Dayton, $500,000 will get you a 4,500-square-foot single-family home with 4 or 5 bedrooms," he says. "In San Francisco, that same $500,000 will buy a 1,000-square-foot, 2-bedroom fixer-upper in the city outskirts or a 600-square-foot studio or 1 bedroom condominium."
Realtors and appraisers spend a lot of time assessing the qualities of a property, inside and out. According to the National Association of Realtors, home upgrades can largely increase property value. Kitchen and bathroom upgrades are the most popular updates, are they are important to buyers because such remodels can be costly and arduous to take on themselves. Other common updates include a new roof, new hardwood flooring, garage doors and insulation.
The Hanley Wood Remodeling website offers a free "Cost vs. Value 2017" tool to view national and regional average costs for real estate upgrades and updates. Sometimes, severely outdated properties are listed at a similar price as updated properties. So let's say you're comparing regional properties priced at $500,000. One property might be in move-in upgraded condition, while another needs significant upgrades that would require you to spend thousands of dollars after purchase. Why is this? There are other driving forces affecting sale price.
A classic real estate saying is "location, location, location." Buyers value not only a home's build but also its surrounding community. This includes certain lifestyle factors like school district, proximity to shopping and recreational centers, and public transportation. In a Trulia blog article titled "What's My Home Worth? 9 Factors That Affect Resale Value," Meaghan Agnew writes that poor placement of a home can almost guarantee value stagnation. "This is why two identical homes in the same neighborhood can have wildly different listing numbers if one is on a cul-de-sac and the other backs up to a four-way road," she says. On the other hand, "if you've sat on a property that has seen infrastructure spring up all around it in recent years, you're likely to witness a pleasant jump in perceived market value, especially if the specs of your home appeal to younger professionals looking for walkability."
Every buyer wants to make a good investment. This year, Forbes teamed up with Local Market Monitor, a company that tracks more than 300 housing markets. CEO Ingo Wizner and his team analyzed housing indicators and broad growth trends to come up with 20 markets in the country that offer buyers affordability and growth. "These are markets where you can make an investment, you are probably going to get a good return and you are not taking an extraordinary risk," Wizner says.
Dallas claimed the No. 1 spot. They observed that the recession did not hit the Lone Star State quite as hard, so it came back quicker and more jobs have been created faster than in the rest of the country. Affordable housing and opportunity led more people to the state in 2015 than any other state except Florida. Four Florida cities made the list -- more cities than any state -- including Jacksonville at No. 2 and Orlando at No. 3. Major markets in California and on the East Coast, such as New York and Washington, did not make the list, but Boston did. Its market is slightly undervalued, and prices are expected to increase 20 percent by 2020. The article "Best Buy Cities: Where to Invest in Housing in 2017" has the full top 20 list.
Online real estate marketplaces such as Realtor.com, Zillow and Trulia and realty companies' websites are useful preliminary resources to get familiarized with a new housing market. No matter whether your target destination is 10 miles away or 1,000 miles away, these sites will allow you to search for millions of for-sale and rental properties, compare housing estimates and connect with local professionals.
Being an informed buyer is essential to make a purchase that is smart for both your financial situation and your lifestyle. If possible, travel to your desired location to connect with a qualified licensed Realtor and spend some time familiarizing yourself with the area.