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There are a whole lot of reasons many folks prefer buying newly constructed homes—with their shiny new finishes, faucets, and fixtures—as opposed to places that have accumulated the grime, wear, and tear of generations of strangers.
But price is definitely not one of them.
The harsh reality is that you’ll pay a premium for the privilege of buying a house in which no one has so much as boiled water on the stove or taken a bath in the tub. Across the U.S., the median price of a newly built home was $316,700 in October, according to the National Association of Realtors®—a steep 16.9% increase over existing homes. Yikes! It’s a continuing hangover from the Great Recession, when home construction in most markets ground to a halt. Now that it’s finally picking up again, builders are focusing more on higher-end, higher-profit projects.
“Homebuilders are seeing costs increase left and right,” says Ali Wolf, director of economic research for Meyers Research. “Land is extremely expensive, local governments have hefty fees, and wages for construction workers are on the rise—all of these factors drive up the cost of new homes.”
But don’t despair—there are still pockets of affordable, new construction tucked away across the nation, particularly in the South and Midwest, where more land is available, labor is cheaper, and fewer local regulations hold up projects and inflate costs. So our thrifty data team went out to find these metros where a brand-new starter home won’t require you to sign over your firstborn (for whose sake you wanted to buy a home in the first place)!
In many of these affordable wonderlands, developers have been offering first-time buyers homes with a smaller footprint that saves on costs but still has enough space to grow a family.
To figure out the best places buyers can find a brand-new home they can actually afford, we looked at 12 months of CoreLogic’s new-home data in the 150 largest metros in the United States ending in May 2019 to see which places had the lowest median prices for new construction. To narrow the list, each city had to have at least 500 new-home sales during the year, and we limited our picks to one per state to keep it geographically diverse. It includes all types of shiny, new homes, from single-family to condos, co-ops, and townhomes.
Ready to find the sparkling new home of your dreams?
Tony Frenzel
1. Oklahoma City, OK
Median price of a newly built home: $227,550
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After taking an economic dive in the oil bust of the 1980s, and then the recession of the 2000s, Oklahoma City is making up for lost time with local builders erecting affordable homes at what feels like lightning speed.
That’s a good thing considering the sprawling metro, steeped in Western culture and history, has been steadily growing. Oklahoma City’s population has increased 11.9% since 2010, according to the U.S. Census Bureau, due to its diverse jobs market, high quality of life, and overall affordability.
The undeveloped land that surrounds the downtown has been transformed by builders who have been able to erect small, stick-built (wood-framed) homes on flat parcels, allowing them to build faster and at a more affordable price than in hilly parts of the U.S.
“You can live like a king in Oklahoma City,” says Becky Ivans, broker with Movers Real Estate Co. “We have a lot of private builders who take such pride in their product.”
On the east side of town, in the popular Choctaw School District, buyers can snap up new, nice-size, single-family homes with open floor plan for just over the local median price. This three-bedroom ranch with stainless-steel appliances is going for $239,900. Toward North Oklahoma City and Edmond, where new developments are going up like cattle ranches once did, folks seeking a shiny space for under $200,000 will find options such as this three-bedroom smart home for $197,346.
2. Winston-Salem, NC
Median price of a newly built home: $229,750
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Artsy Winston-Salem attracts transplants and retirees primarily from the Northeast, who enjoy the laid-back lifestyle and warmer weather without straying too far from their roots. Although new-home prices in Winston-Salem are still considered a steal compared with many other cities, as more and more folks have been moving to town, prices have been rising.
“The same houses that were being built for $150,000 to $175,000 last year are now $175,000 to $225,000,” says Ty Keating, broker at Keller Williams Realty Elite. “It’s definitely come up quite a bit.”
Buyers who want a shiny, two-story, three-bedroom with an attached garage and trendy siding can get into the Bluffs at Hillcrest, where units start at just $200,000. This new development is about a seven-minute drive to downtown. And even closer to all the downtown museums, restaurants, and parks, new developments like Sedge Hollow are attracting young families and retirees. There, a similar two-story, three-bedroom home
can be purchased for $216,900.
“When people from more expensive places like New York, Pennsylvania, and California move here, they’re shocked at how far their money goes,” says Keating. “The dirt is cheaper here.”
3. Myrtle Beach, SC
Median price of a newly built home: $233,250
realtor.com
Myrtle Beach has long been known as a tourist getaway with loads of family-friendly attractions, and a sweet, sweet coastline.
But folks are flocking to this seaside town like seagulls to a picnic. The population (currently 350,000) has skyrocketed 25% in the past decade—making it the fastest-growing metro in the United States.
That growth has been manageable as more and more land has been opened up for new homes, says Angela Fabbri with the Coastal Carolina Association of Realtors, creating a healthy balance between supply and demand.
Myrtle Beach is eternally popular with retirees, and while there certainly are new communities for the 55-plus set, many of the new subdivisions that have been going up throughout the metro are geared toward mixed-age families.
Walkable communities like Market Common have been luring residents of all ages with community pools, pickleball courts, amenity centers, and affordable single-family homes, including this three-bedroom smart ranch for $226,000 and this four-bedroom open concept with granite countertops for $254,800, both of which are just a short golf cart—yes, golf cart—ride to the beach.
4. Birmingham, AL
Median price of a newly built home: $253,150
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Brand-new residences are popping up like mushrooms after a spring rain in Birmingham’s artsy downtown. Buyers can get a new condo for as low as $100,000, including this one-bedroom—as long as space is not a top priority. Microapartments as small as 300 square feet, like this one-bedroom for $119,900, are popular among young buyers who prize location over house guests—or roommates, or significant others, or kids.
But while it is possible to find centrally located, single-family homes for under the median new-home price in Birmingham, most of the deals are in new subdivisions outside of town in St. Clair and Shelby counties.
“You get a lot more for your money,” says James Marzano of Adams Homes. “Young families with children trying to get out of apartments have a lot of options.”
5. Cape Coral, FL
Median price of a newly built home: $257,000
realtor.com
After seeing big runups in home prices in 2017, the waterfront city of Cape Coral has transitioned to a buyer’s market (recent hurricanes and toxic blue-green algae blooms certainly didn’t help home sales). But the city, which boasts more canals than any other place in the world (400 miles of ’em, to be exact), is one of the most affordable in Florida. And many folks who want to thaw in the Sunshine State have been choosing to relocate to this rapidly growing area where home prices are a fraction of similar properties across Alligator Alley near Miami, Broward, and Palm Beach.
Lots of retirees and some young families (45 was the median age of residents in 2017) have been picking up new single-family homes built on one-off plots just north of downtown in already established neighborhoods. The offerings include this four-bedroom for $239,305 and three-bedroom for $229,900.
6. San Antonio, TX
Median price of a newly built home: $259,500
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Texas has a lot going for it in the new-home market: a growing population, lots of flat land, and precious few regulations standing in the way of homebuilders.
“Practically every area [of San Antonio] has new construction,” says Scott Jauregui, a Keller Williams agent. “We’re tearing down homes in established areas to make room for new ones.”
Right in the heart of downtown, buyers who want cool, contemporary design can find new homes like this three-bedroom with an enviable deck for the low, low price of $230,000. And, like most places, the farther out you’re willing to go, the more you get for your moolah.
Why are the deals so good?
“Affordability is relative to income,” says Jauregui. The city’s median income is $49,024 and the minimum wage is just $7.25 an hour, so just about everything here is cheap compared with many other metros. Gas costs about $2 a gallon, there’s plenty of inexpensive land on which to build, and labor costs are reasonable—all of which has been helping to keep the cost of new construction down.
7. Knoxville, TN
Median price of a newly built home: $275,300
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Knoxville is another place seeing affordable new homes popping up in every direction. Both young families and retirees have been snapping up just-built, traditional-style, single-family homes in the $250,000 range.
Many of the best new developments—the ones with pools, walking trails, and other amenities favored by buyers—are toward the north and west of the Old City, where developers such as D.R. Horton and Smithbilt have been focusing on erecting well-appointed homes residents actually can afford.
Those who want easier access to downtown can still get granite countertops and stainless-steel appliances for comparable prices. For example, this three-bedroom for $225,000 is about half the size without the cool water slide.
8. Tucson, AZ
Median price of a newly built home: $277,900
realtor.com
Where most national homebuilders tend to seek out large plots of land for sprawling, master-planned communities, local builders in Tucson more typically are seeking out small pockets of development, like vacant lots, helping to keep new-home prices affordable and breathing new life into old neighborhoods.
“Tucson has traditionally been a city that is very, very spread out,” says John Mijac, managing broker at the Foothills office of Long Realty Co. in Tucson. But this newer type of development “kind of makes the city feel more connected.”
Those who want to be amid downtown Tucson’s thriving restaurant, bar, and cultural scene can find affordable, newly built homes in established neighborhoods like Menlo Park. Options include this three-bedroom, Craftsman-inspired spot for just $249,900. In centrally located developments like Camino Moderns, buyers can get a three-bedroom smart home for $277,7330.
9. Cincinnati, OH
Median price of a newly built home: $284,800
realtor.com
Like most cities, Cincinnati has plenty of new suburbs with new tract homes rimming its outer edges. But what’s most interesting about new-home development in the Queen City is that the local government is heavily incentivizing new construction within city limits.
The city residential tax abatement program offers buyers discounted tax rates for 15 years to help further revitalize the core of the urban area. The result: 25% of the homes constructed in the metro area are being built within the city limits, says Heather Kopf, owner/partner of Kopf Hunter Haas Realtors.
“People are really coming back,” she says.
In walkable neighborhoods like Madisonville, buyers with an income under $60,000 can find new, single-family homes backed by city programs. Homes such as this three-bedroom for $169,000 are quickly snatched up. And there are even options without income restrictions in vibrant areas nearby, such as this brick three-bedroom for $249,000.
10. Atlanta, GA
Median price of a newly built home: $290,350
realtor.com
The real estate market in “Hotlanta” has been living up to its nickname for the past several years. All over the metro area, homes have been sprouting like bamboo, from planned communities for retirees and families who want swimming pools and tennis courts out in the burbs—which sprawl out across hundreds of miles spread throughout five large counties—to infill projects in town.
Developers and savvy buyers have been snapping up lots and older homes for teardowns. Many of the best deals on new construction can be found in south and west side neighborhoods near the upcoming Beltline. Currently under development, the former railway line circles the core of the city, connecting 45 neighborhoods with 33 miles of light rail, hiking trails, and parks, which will spill out near breweries, restaurants, and shops.
Buyers who want to get in now have been forgoing the sprawling lawn and large bedrooms for walkability in well-laid-out homes, including this three-bedroom bungalow near Pittsburgh Yards and the Beltline for $240,000.
On the east side of town, buyers who want to get a brand-new place for under the median price have been going even smaller with condos and townhomes, including this Cabbagetown one-bedroom for $249,900.
“Many buyers are like, ‘Screw the yard,’ I’d rather be 10 minutes from work,” says Ryan Sconyers, a real estate agent with Graham Seeby Keller Williams. “People want to be able to walk and Uber everywhere.”
The post Shiny, New, and Bargains, Too: Cities Where a Brand-New Home Won’t Break the Bank appeared first on Real Estate News & Insights | realtor.com®.
source https://www.realtor.com/news/trends/the-best-places-to-buy-an-affordable-new-home/
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