Just how high can home prices go in America’s biggest cities? That’s the question many prospective buyers are asking as they wait (and wait) on the sidelines of the nation’s top housing markets—watching for that magical time when crazy-high price tags get slashed and they can sprint toward the homeownership end zone.
That day hasn’t come yet. Sure, the pace of home price growth nationally has slowed a bit in recent months. However, we’re still far from an overall buyer’s market, with prices continuing to move upward in most places. And that climb has been the most pronounced in the big cities. The median home price in urban areas is up 36.1% over the past three years*, compared with a 24% jump in suburban areas and 18.8% in rural communities. Put simply: Big cities are just as desirable as ever, and are still engulfed in bidding wars.
But don’t give up and sign that new rental lease just yet! There are neighborhoods in the country’s biggest cities where home buyers have the upper hand—places where prices are affordable, plenty of homes are for sale, crime is relatively low, and the work commute is reasonable. The realtor.com data team set out to find these urban unicorns.
“Buyers are getting creative to make the dream of homeownership become a reality, while also dealing with the reality of their budget,” says Danielle Hale, chief economist for realtor.com®. “They’re looking for homes that might be smaller or maybe require some work, or to neighborhoods that are less expensive that might be their second pick.”
“Usually what you want are not the established neighborhoods,” agrees Andres Carbacho-Burgos, a senior economist focused on housing at Moody’s Analytics.
To come up with our list, we analyzed the ZIP codes in the nation’s 10 largest cities. We measured median prices, days on market, and the share of homes for sale. And we included only ZIP codes with at least 12 homes on the market in any given month.
To ensure these were places where folks would actually want to live, we eliminated neighborhoods where commuting to the city center by car or public transit takes more than an hour in rush hour, and we knocked off places with high crime rates. In two markets (Dallas and Miami), our picks actually have higher home prices than the overall city. The reason: Many neighborhoods in these places have high crime rates and were removed from our rankings.
OK? Let’s take a tour of the secret (and safe!) big-city neighborhoods that won’t break the bank.
Best Bet For Buyers in America’s Biggest Cities
1. New York, NY
Homes in Astoria
For the past few years, Queens has been touting itself as the “new Brooklyn” as prices in that ultratrendy borough have gone nuts. There are still a few refuges here where folks can find reasonably priced homes, relative to the rest of New York City, and enjoy top-notch ethnic restaurants, craft cocktails, and plenty of fun things to do.
Enter the Ditmars-Steinway section of multicultural Astoria. The area is easily accessible to Manhattan and boasts plenty of condos, co-ops, townhomes, and modest—albeit pricey—multifamily brick homes. The latter offers buyers a chance to rent out the other housing units to help with their mortgage payments. (Realtor.com looked only at single-family homes in our analysis.)
“Proximity to Manhattan is one of the main reasons people like Astoria,” says Paul Halvatzis, a real estate agent with Amorelli Realty. “You can be in midtown in four or five subway stops, and the area is very safe.”
Let’s get back to that cuisine: The neighborhood was traditionally known for its Greek, Italian, and Middle Eastern cuisine, but it’s since seen an explosion of international eateries open in recent years. Foodies are crazy about the place.
Houses in Sylmar
JEWEL SAMAD/AFP/Getty Images
It’s so hard to find a true bargain in Los Angeles, more buyers are exploring areas that are a bit off the beaten path. Sylmar is a more rural neighborhood on the edge of L.A., about 45 minutes from downtown. It sits on the foothills of the San Gabriel Mountains and Angeles National Forest. And buyers there can still score some great deals.
“There’s a lot of different types of homes here,” says local Realtor Mel Wilson. “You can get a two-bedroom condo in the $300,000 range or a single-family with property for horses or animals starting in the $500,000s.”
The number of homes on the market is lower now than it’s traditionally been, but more inventory has become available recently.
3. Chicago, IL
Brick bungalows in Ashburn
After a long run of bidding wars, escalating home prices, and an exodus of residents to the low-tax suburbs of nearby Indiana, Chicago’s housing market is starting to come back down to earth. And bargain-savvy city dwellers are beginning to look in the southwestern neighborhood of Ashburn.
The neighborhood boasts plenty of brick bungalows and ranches and is close to public transit and highways. Plus, it’s just a 30-minute drive from downtown. It’s getting an upgrade with beautification projects, lots of home renovations, and a slew of new independently owned stores, cafes, and restaurants.
“This neighborhood has great potential for growth and future price appreciation,” says Nick Libert, a Realtor with Exit Strategy Realty. “It’s one of the most affordable places in the city.”
4. Houston, TX
Three-bedroom home listed for $165,000 in Meadowbrook
Those looking for a Lone Star deal should check out Meadowbrook, a 35-minute rush-hour drive from Houston’s downtown. Budget-conscious buyers are scoring 1,200- to 1,700-square-foot, midcentury bungalows and other fixer-uppers for between $110,000 to $180,000.
Those affordable prices have resulted in an influx of DIY-ready millennial buyers who are purchasing older homes and fixing them up, joining families who have lived in the area for generations.
“Houses will sit on the market longer because it’s not downtown, midtown, River Oaks, or any of the ‘nice, nice’ neighborhoods,” says local real estate broker Isabel Lopez. “But you get a good, safe place and enough money left to live.”
5. Dallas, TX
Four-bedroom house in Winnetka Heights listed at $389,000
More akin to funky Austin than traditional Dallas, this ZIP code includes the Bishop Arts area, perhaps the hottest dining and cultural destination in this sprawling metro. It boasts innovative restaurants, third-wave coffee shops, and live music venues that attract hipsters from everywhere.
However, while just about every Dallas millennial wants to hang out in Bishop Arts, not everyone wants to live amid all the action—and deal with the crowds and lack of parking. So it’s not as hard for buyers to pick up a historic home in this neighborhood, providing they don’t mind getting a fixer-upper. There are also recently renovated homes available for well under the median list price.
But buyers still must be prepared to shell out a bit more than the city’s median listing price, which is dragged down by lots of neighborhoods with high crime rates. Those who love the place believe it’s worth every penny.
“It’s a bit higher-priced in comparison to some other areas nearby because you’re buying the district,” says DeLisa Rose, a real estate broker at Re/Max Ambassadors.
The northern section of the ZIP code is home to Winnetka Heights and Kessler Park. Winnetka Heights is a little cheaper, offering a median list price of $407,000 compared with the $670,000 median in Kessler Park. The latter is a quieter, more upscale neighborhood of well-kept historic homes that are in high demand among those who can afford the old-money locale.
“Kessler Park is where they go when they get married,” says Rose. “Bishop Arts is where people have fun.”
Philadelphia’s Great Northeast, appropriately titled for its proximity to the city center, has become an increasingly desirable—and affordable—place to live.
This ZIP code, which includes the communities of Pennypack Park and Holmesburg, features beautiful green spaces, old-school commerce corridors, and a swath of great restaurants. That area was founded around a gristmill in 1830. So its classic brick and fieldstone row homes have long been occupied by hardworking, blue-collar workers.
More recently, as prices have steadily climbed in the neighborhoods surrounding the city’s center, this has become an increasingly attractive area for 30-something first-time buyers. They appreciate the easy 20-minute commute to downtown, active civic association, and bigger homes, which often include a coveted garage.
“People can purchase a lot of home for the price,” says Britt McLaughlin, a Realtor with Philly Home Girls.
Townhomes in Dupont Circle
Dupont Circle is a safe, gay-friendly neighborhood with good public transit options; a thriving dining, drinking, and shopping scene; and a higher price per square foot that matches its many amenities. A wide mix of younger and older professionals have long called the neighborhood’s beautiful row houses and brownstones home. It’s also home to embassies from various countries.
As nice as it may be, Dupont Circle is considered a balanced market with a healthy mix of buyers and sellers. Prices remain reasonable because many of today’s buyers are hotter for larger properties in neighborhoods that are farther out from the heart of DC but still boast a lively nightlife. These up-and-coming neighborhoods, including Brookland, Shaw, and Columbia Heights, offer more space for the money. As a result, prices in Dupont Circle have been coming down.
“The days on market here are increasing,” says Jennifer Vaughn, a real estate agent with the Mandy and David Team. “Buyers are not as willing to sacrifice space or parking for a cachet neighborhood.”
8. Miami, FL
Two-bedroom, two-bath Miami condo for $360,000
Miami’s buzzy downtown also happens to be one of the city’s few walkable neighborhoods, packed with world-class nightlife and even a few cultural institutions of note. It’s quite safe, too.
That’s partly why the median list price here is slightly higher than the city’s. The other factor is the stronger supply of homes for sale in this part of the city.
As the South Florida real estate market has taken off, developers sought to cash in on downtown’s amenities, putting up high-end condos faster than President Donald Trump sends out tweets. There are now more luxury condos than there are buyers with big-enough paychecks to afford ’em—exacerbated by the drop-off in the international market. So sellers are lowering prices on condos and trying to attract buyers.
Real estate agent Samantha DeBianchi of DeBianchi Real Estate has been able to score some serious deals for her clients. She shocked one recently when she advised him to offer $630,000 on a 1,200-square-foot, two-bed, two-bath listed for $750,000.
“He was, like, ‘You really think I could get it this low?’ And he did.”
9. Atlanta, GA
Atlantic Station development
Hotlanta has been on fire for the past few years, with prices rising steadily. But there are signs that the housing market is beginning to cool, as condo prices and sales are slowing, says Realtor Ryan Sconyers of Keller Williams Realty.
That’s making it easier to get into one of the chic high-rises in Atlantic Station with jaw-dropping views of the city skyline. The neighborhood is just north of the Georgia Institute of Technology and about a 20-minute bike ride from downtown Atlanta. There are plenty of single-family homes in the area, which seems a bit like its own little bubble within the city, with an open-air mall, restaurants, and an Ikea all within a 50-acre gulch that used to be an old steel mill.
10. Boston, MA
Listed at less than $400K in Hyde Park
Hyde Park, which is about as far southwest as you can go in the city, is where many young families, teachers, and police and firefighters (public servants who have to initially live within the city’s borders) have begun laying down roots. The neighborhood is filled with 1950s-era Cape Cod homes with nice-sized yards. And it’s only about 20 to 30 minutes from downtown via commuter rail.
The area isn’t as trendy as the other parts of town; there are few condos and only about five restaurants in the commercial district. But it’s slowly adding some new development. And in a boon to buyers, the neighborhood has seen a surge of new listings hitting the market. They’re up 20% year over year as of Sept. 1, according to realtor.com data.
“We get a lot of people who can’t afford some of the higher-end areas, so they move here,” says real estate broker Pat Tierney of Tierney Realty Group.
Median city list price: $1,400,000 Buyer’s haven: NONE
Somewhere through that fog… there are no bargains.
Greg Chow/Getty Images
Sorry, San Franciscans. There simply aren’t any neighborhoods to find true deals in. Buyers on a budget may want to: a) marry rich, b) play Mega Millions, or c) invent the next Uber. Good luck!
* We compared the first six months of median sale prices in 2015 with the first six months of 2018.
Source: Housing Trends Feed