MICHIGAN MADE THE LIST
10 states where values are greater than prices
In many states, home values have exceeded the growth in home prices, which is ideal for prospective buyers. Different states also have different costs of living, which can increase the purchasing power of your money if living costs are generally lower than the rest of the country.
Indiana has many things going for it as a place to invest in real estate: the cheapest average property prices, good local purchasing power and home value appreciation. Indiana's affordable cost of living got high marks in a recent ranking.
Mississippi has the nation's lowest cost of living and offers the most purchasing power for your dollar. Mississippi's three biggest real estate markets — Jackson, Gulfport and Hattiesburg — have a combined average home price of $191,633. The national median is $275,000, according to GOBankingRates.
Affordable prices and vigorous growth in home values year over year put Idaho high on the list. Home values in Boise, Coeur d'Alene and Idaho Falls increased 13.5 percent, 15.6 percent and 8.6 percent, respectively. Fortunately for property owners, rental rates are on the rise, especially in the Boise area, where rent prices increased to $1,400 in September 2018 from $1,150 in September 2016.
Alabama also ranks among the cheapest states with its low cost of living. But local purchasing power is quite close to that in Mississippi, with the relative value of $100 equivalent to $115.47 in Alabama. The state is also home to Gulf Shores, which a recent studyidentified as a top vacation destination.
Missouri had the nation's fourth-lowest cost of living in the third quarter of 2018, according to the Missouri Economic Research and Information Center. This helps stretch your dollar further. The three largest real estate markets — St. Louis, Kansas City and Springfield — combine for an average home price of $202,900 and home value growth of 8.1 percent.
Nashville, Memphis and Knoxville, the state's three biggest real estate markets, have an average home price of $251,133, with home values rising by 9.1 percent from a year ago, one of the largest increases in the study. The cost of living is relatively cheap in Tennessee.
Arkansas, like many other Southern states, has been on the rise economically. According to the latest Census Bureau data, the state's population is just over 3 million. Its GDP grew by 8.3 percent during the last three years, from the second quarter of 2015 to 2018, according to the Bureau of Economic Analysis.
Ohio has shown it could diversify its economy in the wake of declining industry in the area. The principal real estate markets, Cincinnati, Cleveland and Columbus, offer affordable prices and robust home value growth. The cost of living is below the national average.
The auto industry's nosedive was a hard smack to Michigan's economy in 2008-09. Since then, the state was forced to diversify economically and there has been some improvement. Grand Rapids, always a manufacturing city, now has its employment spread more evenly across manufacturing, health care and social assistance, retail and education services.
Some Southern states are seeing recent economic growth, and Georgia just snagged No. 7 in CNBC's Top States for Business. Taxes are low, and the workforce is skilled. State prosperity helps boost home values, which rose 8.8 percent in one year. At the same time, potential investment property owners can still find affordable residences to buy and rent out, especially in a city like Atlanta, where average rent prices increased from $1,180 in September 2015 to $1,725 in September 2018, according to Zillow.