CNN Money recently released a list of the top ten undervalued real estate markets in the US. In order to determine whether a real estate market is undervalued, the home price trends are weighed against unemployment, income and population growth, mortgage rates, rental prices, and demand versus inventory level. When homes are selling for lower than the local economy can support, that market is undervalued.
For this study, real estate firm West Realty Advisors analyzed data from RealtyTrac, Zillow, and CoreLogic and looked specifically at the median pre-recession home prices in comparison to current median home prices. The median home price differences are listed next to the cities in the list below.
Detroit, MI (-50.08%) Evidence of a revitalized real estate market includes new companies investing in and opening businesses in Detroit.
Orlando, FL (-40.84%) As East Coast residents seek out homes in the warmer southern climate, the affordable prices of Orlando are a large draw.
Las Vegas, NV (-40.55%) The Las Vegas home market is experiencing an increase of new home construction that is keeping the prices low.
Sarasota, FL (-31.03%) In addition to the warm weather, the Sarasota market also offers affordable homes and the growing job market.
Phoenix, AZ (-28.57%) The housing bubble burst hit Phoenix a bit harder than other areas, but it has recovered in a big way. The improving job market is attracting new buyers to the desert city.
Memphis, TN (-25.55%) The Memphis real estate market is offering great opportunities for small real estate investors.
Chicago, IL ( -25.3%) The real estate recovery after the bubble burst in Chicago has been slow, but steady. Expectations of continued recovery have increased investments in the city over the past year.
Manchester, NH (-19.14%) Growth in the manufacturing industry has drawn attention to this New England city. Another draw is that Manchester is only 90 minutes from Boston, a consistently overvalued real estate market.
Columbus, OH (-14.16%) Manufacturing and telecom job opportunities are drawing people to the central Ohio city. Currently, a household with two full-time minimum wage earners can afford to buy a home in Columbus.
Portland, OR (+5.78%) In the past four years, the median home price in Portland has increased 32% and is now slightly above the pre-recession level.