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An analysis of the various factors that influence home prices has warned potential buyers about states they should consider avoiding.
Cost of living, 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 are seeing now offer some valuable clues,” said Yawar Charlie, head of properties for the Aaron Kirman Group at Christie’s International Real Estate. Yahoo Finance.
Since then, real estate experts have begun providing their input on current market trends on GOBankingRates.
The seven states that the experts highlighted in some of their studies are located in almost every region of the United States and include places that were highly impacted by heat waves and natural disasters.
Cost of living, 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 boosted home prices in California, contributing to a crucial reason homebuyers are looking to live elsewhere.
There have been more than 5,000 wildfires and massive heat waves in California this year, but affordability is the top issue for residents of the Golden State.
However, a Los Angeles real estate broker named Charlie explained to Yahoo Finance that “wildfires and droughts” are issues that create affordability challenges.
He added that the recent “tech boom” has also been a problem that has made businesses and potential home buyers 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 limited as demand continues to “outstrip supply.”
“This shortage of supply, coupled with slow wage growth, raises concerns about affordability over time,” Rachael said.
‘As costs rise faster than income, keeping up with mortgage payments could become increasingly difficult.’
The median price of a home in California was initially nearly $845,000, but as of April 2024, the median price will exceed $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 a problem 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 specialist Stringer told Yahoo Finance.
‘Serious considerations include rebuilding costs, disruptions and increased insurance premiums due to storm damage.’
The real estate agent added that properties along the coast can lose “substantial value” due to damage caused by natural disasters.
Not only can it cause a drop in value, but it could also make it impossible to live depending on sea level.
Illinois
Illinois residents have fled the state to live in areas that are more financially stable in part because of high property taxes.
Illinois is a popular state known for its urban and agricultural environments, but Charlie highlighted the problems it has in housing, especially Chicago.
“Illinois, and Chicago specifically, are facing significant financial challenges,” 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 tax increases.’
He added that the state’s financial problems make it difficult for residents to want to stay in Illinois and force them to seek stable environments elsewhere.
The median home value in Illinois is $269,000, which is lower than in California and Florida, according to Zillow.
However, that figure is more than 6 percent higher than last year.
Louisiana
RubyHome founder Tony Mariotti urged prospective homebuyers to consider residing in other states instead of Louisiana despite falling home prices
Louisiana home prices are down 2.5 percent compared to the state’s 2023 property values, according to Zillow.
However, RubyHome founder Tony Mariotti urged potential homebuyers to consider residing in states other than Louisiana.
“Louisiana is very susceptible to the impacts of climate change, such as hurricanes and flooding,” Mariotti told Yahoo Finance.
‘These risks can lead to higher insurance costs and potential property damage.’
The businessman also noted that Louisiana is struggling with “slower job growth and less economic diversification,” which may affect long-term investments.
New Jersey
Currently, New Jersey has a tax rate of 2.26 percent, which is substantially higher than the national average.
One downside to owning property in New Jersey is the high property tax rate, which currently stands at 2.26 percent compared to the national average of less than one percent, according to SmartAsset.
“In addition to high property taxes, New Jersey is dealing with an exodus of large corporations, which impacts job availability,” Charlie said.
The real estate broker also noted that New Jersey has some of the highest health insurance premiums in the U.S., resulting in “another layer of financial distress for its residents.”
Today, the median home price in New Jersey is more than $550,000—151 percent more than the median property price in the United States.
New York
New York has a lower property tax rate than New Jersey, but its infrastructure issue has been a concern for its residents.
New York has a lower property tax rate than New Jersey, but some residents are still concerned.
It is also one of the top five US states that requires its residents to spend a substantial amount of money annually.
“Beyond the high property taxes and cost of living in New York City, there is also the issue of aging infrastructure,” Charlie said.
‘The metro system, for example, is known for its delays and breakdowns, making daily commutes a pain.’
Charlie added that homeowners had also moved to other suburban or rural areas of the US if their jobs in New York had remained remote following the COVID-19 pandemic.
W.V.
Due to the decline of coal industries in West Virginia, some areas of the state have been “economically devastated”
Due to the decline of coal industries in West Virginia, some areas of the state have been left “economically devastated.”
Stringer noted that jobs have dried up, draining the population of small towns in West Virginia.
“Owners may have difficulty finding buyers willing to pay a fair price,” Stringer added.
Although the median price in West Virginia is just over $168,000, that is a 5.7 percent increase since 2003, and its median sales price has increased nearly $30,000.
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