Best Cities for Housing Values, 2011
August 9, 2011
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What's top value in a place to live? Our Best Cities list this year focuses on metro areas with vibrant economies, reasonable living costs, and great amenities.
A mix of midwest and southern cities, our 2011 lineup has several common themes: 1) partnerships that have been vital to nurturing business environments that attract employers and high-paying jobs, 2) low housing costs, and 3) quality of life.
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To identify the winners, Kiplinger's teamed up with Kevin Stolarick, research director at the Martin Prosperity Institute, a think tank that studies economic prosperity. The cost-of-living index is based on the national average of 100. Cities with a score below 100 have a lower cost-of-living. Then our staff reporters visited each of the top cities to help determine the final rankings.
Here are 5 U.S. cities that may offer exceptional values for home buyers in this economy:
5. Knoxville, Tenn.
Population (metro): 680,629
Unemployment rate: 7.7%
Cost-of-living index: 89.7
Median household income: $45,727
Population (metro): 680,629
Unemployment rate: 7.7%
Cost-of-living index: 89.7
Median household income: $45,727
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| No. 5 value city - Knoxville, TN Photo: Knoxville Convention and Visitors Bureau |
Knoxville has managed to avoid the sharpest impact of the Great Recession, thanks to the Tennessee Valley Authority (still the nation's largest public utility), the University of Tennessee and Oak Ridge National Laboratory. Economic steadiness is attracting new businesses, such as Vermont-based Green Mountain Coffee Roasters, which came to the area in 2008.
4. Colorado Springs, Colo.
Population (metro): 608,000
Unemployment rate: 9.3%
Cost-of-living index: 92.0
Median household income: $56,576
Population (metro): 608,000
Unemployment rate: 9.3%
Cost-of-living index: 92.0
Median household income: $56,576
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| No. 4 value city - Colorado Springs, CO Photo: Colorado Springs Convention and Visitors Bureau |
To keep employment rising, Colorado Springs woos companies with tax incentives and a highly educated workforce (nearly 36% of residents are college grads, compared with 28% nationwide). It's a regional hub for Hewlett-Packard, T-Mobile and Progressive Insurance, among other big national employers.
The average home sale price is under $230,000; monthly rent on a two-bedroom apartment is less than $800. Utility costs are exceptionally low, about $222 per month for electricity, water and gas and trash collection. And the setting at the foot of the Rocky Mountains is spectacular.
3. Nashville, Tenn.
Population (metro): 1,520,649
Unemployment rate: 8.5%
Cost-of-living index: 90.7
Median household income: $51,352
Population (metro): 1,520,649
Unemployment rate: 8.5%
Cost-of-living index: 90.7
Median household income: $51,352
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| No. 3 value city - Nashville, TN Photo: Nashville Convention and Visitors Bureau |
The Music City is making a strong comeback from the recession and is expected to add more than 151,000 jobs by 2019 -- an annual rate that's higher than the national average. The majority of the new openings will be in the education and health-services fields. Top employers include Vanderbilt University, Hospital Corporation of America and Nissan North America.
2. Charlotte, N.C.
Population (metro): 1,641,257
Unemployment rate: 10.4%
Cost-of-living index: 93.0
Median household income: $53,168
Population (metro): 1,641,257
Unemployment rate: 10.4%
Cost-of-living index: 93.0
Median household income: $53,168
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| No. 2 value city - Charlotte, N.C. Photo: Visit Charlotte |
Headquarters to Bank of America, the nation's largest bank measured in total deposits, and Duke Energy, which may soon become the largest utility in the country, Charlotte also has a blossoming small-business sector. Its location -- midway between Virginia Tech and Georgia Tech, between N.C. State and Clemson -- puts it in a sweet spot for tapping engineering talent.
Residents benefit from wallet-friendly utility rates and low taxes. Plus, reasonable construction costs and a stock of cheap local materials hold housing costs to just 80% of the national average.
1. Omaha, Neb.
Population (metro): 829,702
Unemployment rate: 4.6%
Cost-of-living index: 90.3
Median household income: $53,457
Population (metro): 829,702
Unemployment rate: 4.6%
Cost-of-living index: 90.3
Median household income: $53,457
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| No. 1 value city - Omaha, NE Photo: Omaha Convention and Visitors Bureau |
A revamped downtown and waterfront area has helped boost the economy and attract a fresh generation of entrepreneurs to Omaha. New businesses such as Paypal have moved to the area to take advantage of ubiquitous, cheap broadband access and Omaha's vaunted midwestern work ethic.
Omahans insist on value, and when it comes to housing, they get it. A brand-new, 3,800-square-foot home with four bedrooms and three baths in a western suburb (still just 20 minutes from downtown) runs $275,000, for example. But a lot of amenities -- especially in the arts -- are cheap or just plain free. We think it's the best value city in the U.S. today.
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