After years of weak housing markets, home sellers are hopeful that this spring’s home-buying season will finally lift prices. In positive news, RealtyTrac reported in March that national foreclosures fell to their lowest levels in five years. Unfortunately, the number of homes that received first-time foreclosure notices also rose 7 percent in March from the previous month, the third consecutive increase this year.
The cost to buy a home varies considerably across the country. Working with online real estate listing database Realtor.com, 24/7 Wall St. identified the housing markets with the highest and lowest prices per square foot.
In general, the cities with the lowest real estate prices per square foot were cities that have suffered from poor economic conditions for some time. Many of these cities have begun to see interest from potential homeowners and investors. Others, however, continue to flounder.
The cities with high costs per square foot, for the most part, have wealthier residents. Five of the 10 most expensive cities are also in the top 10 for median income. Five of the least expensive are in the bottom 20 for median income.
Not surprisingly, Detroit’s cost per square foot of $62.45 was the lowest. San Francisco’s cost per square foot of $420.99 was the highest.
A few of the markets with the lowest prices per square feet experienced large declines in home values during the recession. For the most part, however, these are former industrial centers that have been on the decline for years. They include Detroit, Toledo and Wichita.
As would be expected, the cities with the highest and lowest costs per square foot also have the highest and lowest overall median home prices, respectively. Nine of the 10 metro regions with the lowest cost per square foot are among the 15 regions with the lowest median listing price.
24/7 Wall St. relied on Realtor.com’s February figures for the 146 largest metropolitan statistical areas in the country for median listing price and median square footage to calculate the median price per square foot for each MSA. Realtor.com also provided the number of available listings and the number of online property searches for each MSA in February.
The most affordable homes
- Price per sq. ft.: $62.45
- Median list price: $84,900 (the lowest)
- Median square feet: 1,360 (5th lowest)
- Search rank (out of 146): 2nd
Detroit was one of the hardest-hit cities by the recession. The city had already been undergoing several decades of severe economic drought. Home prices still fell by 54.9 percent from their prerecession peak. The city’s unemployment rate has declined in the past year, but it remains in the double-digit range and is still among the worst among major U.S. cities. Apparently, however, speculators see a silver lining in the Motor City, or at the very least, a bottom in the housing market. In February, only one city (Chicago) among the 146 measured by Realtor.com, had more searches for property than Detroit. This may have something to do with the fact that the median list price in the region was just $84,900 in February, or $13,600 less than the next-highest city.
2. Fort Wayne, Ind.
- Price per sq. ft.: $66.03
- Median list price: $104,900 (4th lowest)
- Median square feet: 1,580 (24th lowest)
- Search rank (out of 146): 76th
Property costs, according to Realtor.com, are the second-lowest in the country in Fort Wayne at $66.03 per square foot. Prices, however, have begun to recover in the region. Between February 2011 and February 2012, the median list price increased by more than 5 percent. However, in the past recorded month, property values fell by 2.78 percent, the fourth-worst decline in the country among the 146 regions studied.
3. Toledo, Ohio
- Price per sq. ft.: $67.02
- Median list price: $100,000 (3rd lowest)
- Median square feet: 1,488 (13th lowest)
- Search rank (out of 146): 117th
Like Dayton, Toledo was once one of America’s largest industrial centers and has fallen on hard times in the past several decades. Poverty and unemployment are both extremely high in the region. Median income is the 14th lowest among the cities on our list. Median property listings are just $100,000 in the region, according to Realtor.com. This is the third-lowest price in the country, amounting to $67.02 per square foot. Nevertheless, there has not been much interest in Toledo property, as it ranks 117th out of 146 on Realtor.com’s most-searched-for list. Median list prices fell by 4.31 percent between January and February of this year, the second-biggest decline among the regions examined.
The least affordable homes
1. San Francisco
- Price per sq. ft.: $420.99
- Median list price: $611,700 (the highest)
- Median square feet: 1,453 (9th lowest)
- Search rank (out of 146): 45th
Of the 146 housing markets examined by Realtor.com, there are none as competitive -- or expensive -- as San Francisco’s. Median price of listed properties in the area is an astounding $611,700, which is more than $100,000 greater than the next-most expensive region, Santa Barbara. Median list price was up by 3.77 percent between January and February, the fifth-largest increase in the U.S. While San Francisco’s housing market is only the 92nd largest, it was the 45th most popular real estate search in February.
- Price per sq. ft.: $381.03
- Median list price: $450,000 (4th highest)
- Median square feet: 1,181 (4th lowest)
- Search rank (out of 146): 120th
The unemployment rate in Honolulu, Hawaii, is just 5.7 percent, which is well below nearly every other major housing market in the U.S. The Hawaiian capital has a median list price of $450,000, the fourth highest in the country. Median list prices have increased by 7.14 percent over the past 12 months and have been flat in the past month. The number of homes available on the market has fallen sharply, which has helped keep prices high. Between February 2011 and February 2012, the total number of listed properties fell by 13.8 percent.
3. Washington, D.C.
- Price per sq. ft.: $372.11
- Median list price: $384,950 (9th highest)
- Median square feet: 1,034.5 (3rd lowest)
- Search rank (out of 146): 86th
Washington, D.C., has had a major period of housing price growth in the past year. The median value of listed properties in the capital region increased by 4.17 percent between January and February alone, the second-largest increase in the country. Over the past 12 months, prices have gone up by an astounding 18.45 percent. During the recession, the region lost only a small percentage of its jobs and is projected to recover nearly three-quarters of the lost positions by the end of this year.