These 20 cities across the U.S. are currently considered buyer’s markets, meaning there’s less competition among buyers and a higher inventory of homes, giving you more negotiating power. Of course, it is possible that values begin to decline or stay flat for several years, so caution is advised. My recommendation is to look for cosmetic fixer or foreclosures that, after adjusting for the cost of repairs, provide a cap rate that is several points higher than current interest rates. It may also behoove you to wait until inventory starts declining instead of increasing.
Below are the cities along with brief descriptions of each.
1. Cape Coral, FL
Cape Coral is known for its extensive canal system, earning it the nickname “Waterfront Wonderland.” This sunny city offers a laid-back lifestyle with easy access to the Gulf of Mexico, making it popular among retirees and boaters. The average home value in Cape Coral is $378,357, down 5.4% over the previous year, as of September 30, 2024. Homes go pending in about 63 days.
2. McAllen, TX
McAllen Convention Center, by Joel Pacheco
Located in the Rio Grande Valley, McAllen is a vibrant cultural hub with strong ties to Mexican traditions. The city offers affordable living, warm weather year-round, and a fast-growing economy, making it a hotspot for new homeowners. As of September 30, 2024, the average home value in McAllen is $223,755, up 3.8% over the past year. Homes go pending in about 50 days.
3. New Orleans, LA
New Orleans Jazz & Heritage Festival, Attribution: Infrogmation of New Orleans
New Orleans is a historic city famous for its jazz music, Mardi Gras celebrations, and unique Creole culture. The architecture in the French Quarter and the delicious cuisine are major draws for residents and visitors alike. The average home value in New Orleans is 238,785, down 6.8% over the past year. Homes go pending in around 66 days.
4. Miami, FL
Miami is an international city known for its bustling nightlife, beaches, and diverse culture. While it’s a world-renowned vacation destination, it also offers a wide range of neighborhoods, from quiet residential areas to the glamorous South Beach. The average home price in Miami is $581,466, up 7.1% over the past year. Older condo buildings are seeing huge assessments due to new requirements to maintain sufficient reserves. Insurance costs are increasing in Florida. Homes in Miami go to pending in around 36 days.
5. Deltona, FL
Deltona is a smaller city in Central Florida, close to both Orlando and Daytona Beach. It’s a family-friendly community offering affordable housing and easy access to nature parks and the state’s many attractions. The average home price in Deltona is $309,696, up 3.1% from the previous year.
6. Honolulu, HI
Honolulu is the capital of Hawaii and a major hub for tourism, especially for its beautiful beaches and surfing culture. It offers a relaxed island lifestyle while still providing urban amenities and a strong job market. The average home price in Honolulu is $791,520, down 1.1% from the past year.
7. Jackson, MS
The capital city of Mississippi, Jackson has a rich history and vibrant arts scene. Known for its Southern hospitality, the city also offers affordable homes and a variety of cultural attractions, including museums and historic sites. The average home price in Jackson, MS is a very affordable $66,244. Home values are down 11.9% from the past year.
8. North Port, FL
North Port Library, by Rino Landa
North Port is a growing city in Southwest Florida known for its warm mineral springs and proximity to beautiful Gulf Coast beaches. It’s an affordable option for families and retirees alike, with ample outdoor recreational opportunities. The average North Port, FL home value is $335,726, down 5.8% from the past year. Homes go pending in about 48 days.
9. Palm Bay, FL
Beach Along Indian River, Castaway Point Park, Palm Bay, Florida, by “Pokemonprime“
Situated along Florida’s Space Coast, Palm Bay offers affordable housing and easy access to both Orlando and Miami. With numerous parks and proximity to the beach, it’s a great spot for those who love outdoor activities. The average Palm Bay, FL home value is $309,095, down 0.8% from the past year. Homes go pending in about 36 days.
10. Jacksonville, FL
Jacksonville, FL night skyline, by Matthew T Rader, MatthewTRader.com, License CC-BY-SA
Jacksonville is the largest city by area in the continental U.S. and offers a mix of urban amenities, beach access, and affordable housing. Its strong job market and cultural diversity make it attractive to new homeowners. The average Jacksonville, FL home value is $296,379, up 0.1% from the past year (relatively flat). Homes go pending in about 43 days.
11. Austin, TX
Austin is known for its live music scene, tech industry, and vibrant culture. The capital of Texas offers a youthful, energetic vibe with outdoor recreation and a rapidly growing economy that has made it a tech hub in recent years. The average Austin, TX home value is $525,797, down 4.8% from the past year. Homes go pending in around 62 days.
12. Tampa, FL
Tampa combines urban living with beach access, making it a popular spot for young professionals and families. Its strong job market, especially in healthcare and finance, attracts many new residents to the area. The average Tampa, FL home value is $375,947, up 1.7% from the past year. Hurricane Milton touched down near Tampa and home insurance rates are likely to be affected.
13. Baton Rouge, LA
As the capital of Louisiana, Baton Rouge offers Southern charm, affordable housing, and a strong local economy bolstered by industries like energy and higher education. Its proximity to New Orleans also makes it a convenient place to live. The average Baton Rouge, LA home value is $220,558, up 1.1% from the past year. Baton Rouge saw an influx of people after hurricane Katrina.
14. Memphis, TN
Known as the home of blues music and Elvis Presley, Memphis offers rich culture and affordable living. The city’s revitalized downtown area and vibrant food scene have helped attract more young professionals and families. The average Memphis, TN home value is $149,253, down 1.4% from the past year. Home go pending in about 36 days.
15. Little Rock, AR
Little Rock is Arkansas’ capital and a hub for government and business in the region. The city offers affordable housing, historic neighborhoods, and easy access to the nearby Ozark Mountains for outdoor enthusiasts. The average Little Rock, AR home value is $210,195, up 3.9% from the past year.
16. Orlando, FL
Home to Walt Disney World and other major theme parks, Orlando is known as a tourist destination but also offers a variety of neighborhoods with affordable homes. Its growing tech industry and education sector make it a great place to live and work. The average Orlando, FL home value is $381,942, up 2.9% from the past year.
17. Wichita, KS
Wichita is Kansas’ largest city and an affordable place to live, with a low cost of living and a strong aviation and manufacturing sector. The city’s museums, parks, and cultural festivals create a welcoming atmosphere for families. The average Wichita, KS home value is an affordable $197,917.
18. Nashville, TN
Nashville is the heart of country music and has experienced rapid growth in recent years. The city’s booming economy, cultural scene, and job opportunities make it a popular choice for both young professionals and families. The average Nashville, TN home value is $431,356, up a mere 1.0% from the past year.
19. San Antonio, TX
San Antonio offers a rich blend of history, culture, and affordability. The city’s landmarks, such as the Alamo and River Walk, combined with a strong job market, make it a desirable place for new homeowners. The average San Antonio, TX home value is $254,032, down 2.9% from the past year. Homes go pending in about 38 days.
20. Lakeland, FL
Located between Tampa and Orlando, Lakeland is a quiet city known for its numerous lakes and affordable living. Its proximity to major cities makes it a convenient place for commuters while still offering a small-town feel. The average Lakeland, FL home value is $321,164, up a minuscule 0.3% from the past year.
These cities represent some of the best opportunities for buyers to find more favorable market conditions. If you’re looking for affordable housing with room for negotiation, these locations are a great place to start.
Be cautious because it is possible, perhaps likely, that these markets will see declining values (or values that are declining after adjusting for inflation). The current annual inflation rate is 2.4%. If homes aren’t appreciating by at least that much, they are going down in value in inflation-adjusted dollars.
It is best to make a cap rate calculation and to buy when the cap rate is more than a couple of points higher than mortgage interest rates AND when inventory has declined over multiple quarters. For the cities in Florida and Texas, of course, you must shop for insurance and include insurance costs (and HOA dues) in your cap rate calculations.