An analysis of the various factors that influence house prices has cautioned potential buyers about the states that they should consider avoiding.
Living costs, crime rates, property issues, local situations, and recent climate change are just some of the factors that can determine which states have better living conditions than others.
‘While no one can predict the market with absolute certainty, the patterns we’re seeing now offer some valuable clues,’ Yawar Charlie, estates director of Aaron Kirman Group at Christie’s International Real Estate, told Yahoo Finance.
Real estate experts have since started providing their input about the current market trends on GOBankingRates.
The seven states experts highlighted in some of their studies are located in nearly every US region, and it includes places that were highly impacted by heat waves and natural disasters.
Living costs, crime rates, property issues, local situations, and recent climate change are just some of the factors that can determine which states have better living conditions than others
California
The tech boom in areas like San Francisco has risen California housing prices, which contributes to a crucial reason as to why homebuyers are looking to live elsewhere
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More than 5,000 wildfires and massive heat waves have occurred in California this year, but affordability is the primary issue for residents of the Golden State.
However, a Los Angeles real estate broker named Charlie explained that ‘wildfires and droughts’ are problems that create affordability issues to Yahoo Finance.
He added that the recent ‘tech boom’ has also been an issue that’s made companies and potential homebuyers not consider living in California.
‘The tech boom, especially in areas like the Bay Area, has driven housing prices to astronomical levels, pushing many to seek refuge in more affordable states,’ Charlie said.
According to Raleigh Realty agent Rachel Stringer, inventory is also tight due to the demand continuing to ‘outpace supply.’
‘This supply crunch, coupled with slow wage growth, raises affordability concerns over time,’ Rachael explained.
‘As costs rise faster than incomes, keeping up with mortgage payments could become increasingly difficult.’
The median price for a California house was initially nearly $845,000, but as of April 2024, its average is now over $900,000.
Florida
Florida properties along the coast are not only expensive, but they are also at risk of substantial damage due to climate change and rising sea levels
Miami can be an issue during the summer due to higher prices, a real estate expert told GOBankingRates.
‘The state’s location makes it extremely vulnerable to hurricanes and rising sea levels driven by climate change,’ real estate Stringer told Yahoo Finance.
‘Serious considerations include rebuilding costs, disruptions, and escalating insurance premiums due to storm damage.’
The real estate agent added that properties along the coast may lose ‘substantial value’ due to the damages from natural disasters.
Not only can it lead to a drop in value, but it could also become impossible to live in depending on sea levels.
Illinois
Illinois residents have fled the state in order to live in areas that are more financially stable in part due to high property taxes
Illinois is a popular state that is known for its city and farmland environments, but Charlie emphasized how much trouble it’s in housing-wise, especially Chicago.
‘Illinois, and specifically Chicago, faces significant financial woes,’ Charlie said.
‘The state has some of the highest property taxes in the country, and Chicago is grappling with a high crime rate and budget deficits, leading to cuts in essential services and increased taxes.’
He added that the state’s financial issues are making it hard for residents to even want to stay in Illinois and making them look for stable environments elsewhere.
The average Illinois home value is $269,000, which is lower than California and Florida, according to Zillow.
However, that number is over 6 percent higher than what it was last year.
Louisiana
RubyHome founder Tony Mariotti urged potential homebuyers to consider residing in other states rather than Louisiana despite its drop in home prices
Louisiana home prices have decreased by 2.5 percent compared to the state’s 2023 property amounts, according to Zillow.
However, RubyHome founder Tony Mariotti urged potential homebuyers to consider residing in other states rather than Louisiana.
‘Louisiana is highly susceptible to climate change impacts, such as hurricanes and flooding,’ Mariotti told Yahoo Finance.
‘These risks can lead to higher insurance costs and potential property damage.’
The entrepreneur also pointed out that Louisiana is struggling with ‘lower job growth and economic diversification,’ which can affect long-term investments.
New Jersey
New Jersey currently has a 2.26 percent tax rate, which is substantially higher than the national average
One con of owning a New Jersey property is the high property tax rate, which is currently 2.26 percent compared to the national average of less than one percent, according to SmartAsset.
‘Besides the high property taxes, New Jersey is dealing with an exodus of major corporations, which impacts job availability,’ Charlie said.
The real estate broker also pointed out that New Jersey has some of the highest health insurance premiums in the US, resulting in ‘another layer of financial distress for its residents.
Currently, the average price of a New Jersey home is over $550,000 – 151 percent above the average US property amount.
New York
New York has a lower property tax rate than New Jersey, but its matter of infrastructure has been concerning for its residents
New York has a lower property tax rate than New Jersey, but some residents are still concerned.
It’s also one of the top five US states that require its residents to spend a substantial amount of money annually.
‘Beyond the high property taxes and cost of living in New York City, there’s also the matter of aging infrastructure,’ Charlie said.
‘The subway system, for example, has been notorious for delays and breakdowns, making daily commutes a headache.’
Charlie added that homeowners had also relocated to other suburban or rural areas in the US if their New York-based jobs had stayed remote after the COVID-19 pandemic.
West Virginia
Due to declining coal industries in West Virginia, areas in the state have been ‘economically devastated’
Due to declining coal industries in West Virginia, areas in the state have been ‘economically devastated.’
Stringer pointed out that jobs have dried up, which has drained populations in West Virginia’s small towns.
‘Homeowners may struggle to find buyers willing to pay a fair price,’ Stringer added.
Although the average West Virginia is just over $168,000, it is a 5.7 percent increase from 2003, and its median sales price rose by nearly $30,000.