One of the COVID-19 pandemic’s most undeniable economic effects has been the red-hot real estate market. In cities across the country, homes are getting snapped up in just days on the market, with multiple offers, sales above the asking price, and many seller-friendly conditions.
Unfortunately for these would-be buyers, the inventory of homes for sale has remained at or near all-time lows throughout most of the last year. Many would-be sellers have opted to stay in their current homes rather than enter a competitive market. Meanwhile, disruptions to global supply chains have created some lags in the construction of new housing stock and raised prices for building supplies like lumber. This combination of high demand and low supply has pushed prices higher throughout the pandemic.
Prices had already been on a steady upward trajectory since the 2008 recession, but the trends that hit the market since the beginning of 2020 represent an even more significant jump. According to data from the U.S. Department of Housing and Urban Development, the median sales price of a U.S. home went from a post-recession low of $208,000 in January 2009 to $329,000 in January 2020, an average increase of $11,000 per year. By January 2021, the median sales price was $347,500, which represented an $18,500 increase over the year prior.
However, the median $350,000 sale price does not buy the same size or quality home in every location. The hot market overall means that many homebuyers are looking for good value—and with prices inflated in markets nationwide, good value can be hard to find. However, the COVID-19 pandemic has made it easier for many professionals to work remotely, and many more have come to value affordable and plentiful living space over proximity to work and amenities found in high-demand urban locations. According to data from the National Association of Home Builders, 21% of homebuyers would now prefer a larger home, and 30% would prefer to live in an outlying suburb post-COVID.
As homebuyers search for good deals on real estate, most of the states where their dollar will go furthest are found in Southern and Midwestern states with low cost of living. At the top of the list, according to data from Redfin, is Arkansas, where a $350,000 home would be 3,349 square feet based on median price per square foot, with Indiana (3,167) and Oklahoma (3,049) also topping the 3,000 square foot threshold. In contrast, the states with the worst ratios are highly competitive, expensive housing markets including Hawaii (644), California (798), New York (922), and Massachusetts (1,052).
To find the locations where homebuyers can get the most for their money, researchers at Inspection Support Network (ISN) used data from Redfin to calculate the hypothetical size of a $350,000 home based on each location’s median price per square foot. ISN also collected data on median sale price, median days on the market, and average sale to list price ratio for each market.
The analysis found that at $172 per square foot, $350,000 is good for a 2,035 square foot home in Charlotte. Looking at all large U.S. cities, Charlotte gives home buyers the 20th most space for $350K. Here is a summary of the data for the Charlotte housing market:
- $350k home size (based on median price/sq ft): 2,035
- Median price per square foot: $172
- Median sale price: $314,000
- Median days on market: 37
- Average sale to list price ratio: 100.5%
For reference, here are the statistics for the entire United States:
- $350k home size (based on median price/sq ft): 1,847
- Median price per square foot: $190
- Median sale price: $347,500
- Median days on market: 28
- Average sale to list price ratio: 100.3%
For more information, a detailed methodology, and complete results, you can find the original report on Inspection Support Network’s website.