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There are many factors to consider when purchasing a home, but evaluating factors such as cost of living, crime rates, climate change, local issues, and property taxes can help you save money.
Whether you're saving up to buy a home, waiting for mortgage rates to drop, or planning a big move in the next few years, researching the market now will pay off later. It will help you decide where to invest.
“No one can predict the market with absolute certainty,” said Yawar Charlie, real estate director with the Aaron Carman Group at Christie's International Real Estate and a cast member on CNBC's “Listing Impossible.” “The patterns we are currently seeing provide valuable clues.”
GOBankingRates spoke to experts about which states to avoid buying real estate in the next five years and why, based on current market trends.
California
Stunning scenery, a vibrant culture, and a near-perfect climate make California so appealing, but the problem is affordability.
“As a Los Angeles real estate agent, I have observed trends that suggest certain states may become less attractive to homebuyers over the next five years,” Charlie said.
“It's not just the high cost of living here; the state also struggles with issues like wildfires and drought, which can make homeownership even more difficult and expensive,” he explained. did.
“Furthermore, the tech boom, especially in areas like the Bay Area, has caused housing prices to rise to astronomical levels, prompting many to seek refuge in more affordable states.”
“Demand continues to outstrip supply and inventory is significantly tighter,” added Rachel Stringer, a real estate agent with Raleigh Realty.
“This lack of supply, combined with slower wage growth, raises affordability concerns over time,” she explained. “Maintaining your mortgage payments can become increasingly difficult as your expenses increase faster than your income.”
florida
For many retirees, Florida is a sunny paradise, but one bad storm can quickly turn it into a nightmare.
“The state’s location makes it extremely vulnerable to hurricanes and sea level rise due to climate change,” Stringer said. “Serious considerations include rebuilding costs, disruption, and higher insurance premiums from storm damage.If sea-level rise makes coastal properties uninhabitable, their value could be significantly lost. There is a sex.”
thank you!
illinois
Known for its large cities and vast agricultural land, Illinois is a major manufacturing center for food, chemicals, rubber products, and more.
But Charlie says the state is facing a problem.
“Illinois, and Chicago in particular, is facing a significant fiscal crisis,” he said. “The state's property taxes are among the highest in the nation, and Chicago suffers from high crime rates and budget deficits that have led to cuts to essential services and increased taxes. find it difficult to justify staying even when they can find safer and more economically stable environments elsewhere.”
louisiana
Louisiana is a state known for good times, great food, and a rich culture that people enjoy. However, you might want to reconsider investing in real estate there, according to RubyHome founder Tony Mariotti.
“Louisiana is highly susceptible to climate change impacts such as hurricanes and flooding. These risks can cause increased insurance premiums and potential property damage,” he said.
“The state also suffers from low job growth and economic diversification, making it a less attractive long-term investment. Infrastructure issues here further compound the challenges of real estate ownership.”
new jersey
New Jersey is another East Coast state to avoid when purchasing real estate.
“In addition to high property taxes, New Jersey is facing an exodus of large companies, which is impacting job security,” Charlie explained. “The state also has some of the highest health insurance premiums in the country, creating additional financial stress for residents.Additionally, congestion and congestion add to the daily stress, especially for those commuting to New York City. There is a possibility that
new york
Another notoriously expensive state is New York, but Charlie said there are bigger issues beyond the cost factor.
“Besides high property taxes and the cost of living in New York City, there's also the issue of aging infrastructure,” he noted. “For example, the subway system is notorious for delays and breakdowns, making daily commutes a headache. Additionally, the pandemic has shifted many jobs to remote work, reducing the need to live in or near cities. Many people are moving to the suburbs and rural areas.
west virginia
West Virginia is known as coal country, but the coal industry is in decline and “many regions have been economically devastated,” Stringer said. “As jobs dry up, these small towns are depopulated, leaving little demand for housing. Homeowners may struggle to find buyers willing to pay a fair price. ”
