Well, Toto might not be in Kansas anymore, but Dorothy might want to reconsider, since she and the doggo can get a lot more digs there than in most places right now. A report released by Porch earlier this month says the Sunflower State easily leads the pack when it comes to states where you can get the most house for the money.
Researchers for the home improvement website used data on price, affordability, home size, and changes in value from Zillow, Realtor.com, and the U.S. Census Bureau to create a composite score for each state and nearly 50 major metro areas.
Kansas easily led the list, followed in order by Mississippi, Indiana, Arkansas, North Dakota, Oklahoma, Wyoming, Kentucky, Alabama, and Utah.
"Notably absent from the top of the list are coastal states like California and Massachusetts, where price per square foot and home payments as a share of income are much higher than in the rest of the country," Porch observes.
Indy races to the top among major metros
Residential real estate investors -- whether seeking a flip or a rental -- need to get a bit more granular than what state to look at, of course, and the Porch piece has you covered there, too.
By its bang-for-the-buck metrics, Porch places Indianapolis atop the list for major metros, followed by Kansas City, Cleveland, Raleigh, Salt Lake City, Charlotte, Birmingham, Houston, Dallas-Fort Worth, and Oklahoma City.
At the bottom of the list at number 46 is San Jose, California. Here's how much the top and bottom of the list differ: The median square footage for a home sale in Indianapolis was 2,308 and the price tag was $238,562, or $113.70 per square foot. The monthly payment as a percentage of household income was 18.9%
Now, for San Jose, make that $724.82 per square foot for $1,196,565, and that gets you a 1,696-square-foot house and a mortgage that accounts for 40.1% of the average monthly income for that market.
As an investor, average monthly income for the mortgage may not seem as relevant, but that high price tag also means pricing a potentially substantial portion of the rental market out of your range, as well as the size of the potential buying pool if you're seeking to buy and sell quickly.
The midsize and smaller metros skew well inland
The top 10 for midsize metros are:
- Provo, Utah
- Ogden, Utah
- Fayetteville, North Carolina
- Huntsville, Alabama
- York, Pennsylvania
- Wichita, Kansas
- Mobile, Alabama
- Flint, Michigan
- Fort Wayne, Indiana
- Boise City, Idaho
For small metros, numbers one through 10 are:
- Longview, Texas
- East Stroudsburg, Pennsylvania
- Jackson, Tennessee
- Binghamton, New York
- Wichita Falls, Texas
- Decatur, Illinois
- Decatur, Alabama
- Bay City, Michigan
- Jefferson City, Missouri
- Logan, Idaho
The Millionacres bottom line
It's interesting to note that sprinkled through these lists are markets regularly reported to be among the nation's hottest, such as Charlotte and Raleigh in North Carolina, Salt Lake City in Utah, and Boise in Idaho.
While they are indeed seeing price spikes -- 13.4% in the past year and a projected 16.0% for Salt Lake City are included in the Porch report -- they still represent relative values versus pricier coastal markets, especially for the larger homes that people desiring more space inside and around them are seeking as a result of the pandemic.