4 cities where homes are cheap

People are being drawn to areas where housing prices have fallen or are flat, but those moving to such areas often find a shaky local economy or different culture

November 06, 2005|By PATRICK O'GILFOIL HEALY | PATRICK O'GILFOIL HEALY,THE NEW YORK TIMES

Here are the stories of four towns the housing boom forgot.

Their house prices have sat still or crept up slowly while values across the country raced past them at gold-rush pace.

For some people, these cheap markets represent the last true bargains in America. Bit by bit, families are relocating from expensive towns to affordable ones, drawn by the good housing stock and low home costs.

To understand the lure of these overlooked markets, it helps to begin with the median price of an existing home nationally - $220,000 - and see what it buys in these four locations.

Go west, to Billings, Mont., and you can buy that median house and still have $80,000 left over. Head south, to Spartanburg, S.C., for an even better deal: Housing prices there are about half the national median. In upstate New York, the cheapest market in the Northeast, $220,000 will get you two houses in Binghamton and leave $40,000 to furnish them. In Youngstown, Ohio, you could buy almost three houses.

"It's nothing compared to the rest of the country - nothing," said Billie Briggs, a real estate agent in Binghamton, N.Y. "We're still very affordable. I have schoolteachers who are looking to buy houses in the $70,000 to $85,000 range. A lot of times, people can buy mansions."

As with any cheap investment, homeowners in these areas risk buying a seed that will never sprout. Houses are inexpensive for a reason.

Often, local economies are depressed, the population is aging and shrinking, and the cities are far from cultural and economic hubs.

Families that moved to these towns for their affordability say it has been painful to leave behind relatives and friends, yank their children from school and move to places that are physically remote and culturally foreign. Some have contemplated moving back.

But day by day other transplants said they are making their decisions work.

Binghamton, N.Y.

Median price: $93,000

Even though home prices in Binghamton have grown 10 percent since 2002, the city remains one of the cheapest metropolitan housing markets in the Northeast, according to the latest quarterly index by the National Association of Realtors.

Like Rochester, Buffalo and other struggling cities in Upstate New York, Binghamton saw its housing prices stagnate as the local economy shed nearly half its manufacturing jobs over the past 15 years. That trend may be starting to turn around, however. In the last few years unemployment levels have dropped and now stand at 4.7 percent, and real estate agents say housing prices are showing some bounce.

Jim and Loretta Beals, a retired couple living on Long Island, are trying to buy a ranch house in Binghamton before the prices bounce too high. After living in various parts of New York, they had retired to Long Island to be close to their children, but Loretta Beals said she and her husband are weary of living in a two-room apartment attached to their children's home in Lindenhurst.

"Sometimes you just want a little more room," said Loretta Beals, who worked for the New York Department of Motor Vehicles and Department of Correctional Services before retiring. "We couldn't afford to buy a home on Long Island, and the apartments are very expensive to rent," she said.

The couple began looking along Interstate 81 and near the Pennsylvania border. The commuter suburbs of New York City were too expensive, and Syracuse was nice, but too far away. Towns of 2,000 and 3,000 people were simply too quiet, Loretta Beals said. Binghamton was affordable and a four-hour drive to Long Island - just close enough.

Two newlyweds, Rita and Scott Morgan, are reaping the economic benefits of buying in Vestal, in the Binghamton area, where he got a job at the State University of New York. Rita Morgan sold her three-bedroom townhouse in Wappingers Falls in Dutchess County for $215,000 and bought a larger home upstate for $160,000. It is a 1936 Cape Cod that sits on a half acre, and she plans to put $20,000 into renovations. The rest of the profits will go toward the couple's savings and big-ticket purchases like furniture and a riding lawn mower. "It's all-around much nicer," Rita Morgan said. "We're on a dead-end street in a beautiful section. We did very well."

Youngstown, Ohio

Median price: $82,900

Youngstown was an escape hatch for the Kaplin family.

Three years ago, Ken Kaplin lost his job developing stealth technology, but he and his wife, Sherri, decided to stick it out at their home in New Haven, Conn. The Kaplins' children were in school and the family had a well-formed social network through their Orthodox Jewish synagogue.

But three years passed with no job prospects for Kaplin, and the pressure of caring for children and aging parents forced Sherri Kaplin to give up her job as a certified nurse's assistant. With each month and each mortgage payment, the family carved itself more debt. They decided they had to sell the house, buy in a cheaper market and use the equity to pay their bills and survive until Kaplin found work.

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