Housing Market 2023: Avoid Buying A Home In These 10 Places If You Want To Gain In Value

 

Housing Market 2023: Avoid Buying A Home In These 10 Places If You Want To Gain In Value

Buying a home would have a dual benefit: firstly, by providing a place to live, and secondly, by becoming a profitable investment. Fortunately for most homeowners in the United States, home values have risen steadily over the years - although some markets have far outperformed others.

Between 1991 and 2022, the average annual increase in house prices was 4.3%, according to a Credit Karma report that cited data from the Federal Housing Finance Agency. Since 2000, the rate has averaged 4.7% annually. From 2012 to 2022, the average rate was 7.7%. However, during the 12 months ending in April 2022, the national median home value increased by 18.8%, buoyed by a hot housing market. Home prices and values in most US markets will continue to rise in 2023.

Your home's appreciation rate depends on many factors, with location at the top. For example, the median home value in Florida rose about 30% in one-quarter last year, Credit Karma reported, while the value of homes in North Dakota rose about 10% over the same time frame.

Regardless of how the US housing market generally performs in the coming years, buying a home in some areas of the country will be better than in others. A recent home analysis by SmartAsset compared home value data in 400 metropolitan areas between 1998 and 2022 found that Texas outperformed the rest of the country regarding home value growth and stability, while Michigan consistently ranked near the bottom.

If you want to see how much difference location can make to home values, consider that from 1998 to 2022, average home prices in the Austin-Round Rock-Georgetown metro area increased by 354%. In contrast, prices rose only about 72% in Flint, Michigan, over the same period.

Sometimes, you only have a few choices about where to buy a home because of work or family commitments. But when you have the flexibility, it pays to do your research and decide where your money is best spent.

If you're in the market for a home right now, here are ten places you should avoid if you want to see your home value skyrocket. The ratings are based on SmartAsset analysis and consider historical increases in home values and the 'Historical Rate of Home Loss Value,' which reflects the potential for a price decline of 5% or more within a decade after purchase.

1. Flint, Michigan: The average home value loss is 45%.

2. Monroe, Michigan: 44%

3. Detroit-Dearborn-Livonia, Michigan: 44%

4. Saginaw, Michigan: 40%

5. East Stroudsburg, Pennsylvania: 45%

6. Rockford, Illinois: 39%

7. Bay City, Michigan: 40%

8. Kokomo, Indiana: 39%

9. Warren Troy Farmington Hills, Michigan: 42%

10. Jackson, Michigan: 42%