Worst States To Buy Property in the Next 5 Years, According to Real Estate Agents
Real estate was, is, and remains one of the top wealth builders for the middle class. But, as homeowners today know, not all real estate is created equally.
Some properties are worth far more than others — and some properties gain far more value than others. Homes in California, Nevada, and Washington state are increasing exponentially in value as years go by — meaning that buying in these states will provide you with a great return on your investment.
But what are the 25 worst states to buy property in the next five years? Here is what realtors and other housing professionals say.
1. North Dakota
North Dakota is a state with one of the smallest populations — and there’s no sign of the state growing in any way, any time soon.
Because of the low population, selling a home for a fair market value is all but impossible — and the homes don’t hold their value. Based on the personal income of many of the state’s residents — which is far lower than what’s required to purchase a home in the area — the state is considered the worst to buy a home in.
2. Connecticut
Connecticut is home to beautiful houses and lavish estates — if you can afford it.
According to a report by Consumer Affairs (via CT Mirror) — who compiled their data from the likes of the U.S. Census Bureau, the U.S. Bureau of Economic Analysis, and the Bureau of Labor — Connecticut’s high unemployment rate and low inventory availability make it the worst state in the union for renters. Buyers, too, don’t fare much better, as property values have only increased by about 2 percent over five years.
3. Vermont
With gorgeous mountains and progressive policies, Vermont has become a haven for many up-and-coming millennials who are looking to buy a house.
But these millennials had better be careful before plunking down their hard-earned cash, because the Vermont Daily Chronicle notes that the state has the second-worst economic prospects in the nation, making property less than desirable there for those who look at homes as a potential long-term nest egg investment.
4. Virginia
Retirees love raving about the benefits of Virginia thanks to the perceived beauty of Virginia Beach, but the state is actually one of the worst to buy a home in.
An expert from the northern part of the state notes that it’s the tenth worst state in the country in which to buy a starter home — and many of the residents can’t afford to buy there due to their below-average incomes. Consequently, too, many of the homes in the area don’t retain their value year-over-year, making it a net negative overall.
5. West Virginia
West Virginia is typically known as a “coal country” because it was once the U.S.’s coal mining hub. Now, however, there are cleaner energy options available — and the state is in economic freefall.
Disappearing jobs have resulted in people leaving small towns in droves — making it difficult to attract a buyer willing to pay a fair market price, according to a housing expert who spoke to The New York Post.
6. Alaska
Alaska is a great place to go on a breathtaking cruise, with some of the most gorgeous tundra and mountains you will ever see in your life.
But its housing market leaves much to be desired. According to Yahoo! Finance, Alaska’s homes are nowhere near as affordable as they should be, and the cost of living in the state is through the roof due to the high expense of transporting much-needed resources and provisions.
7. Alabama
While much ado has been made about Montgomery, AL being a fast-growing hub of industry, Alabama’s quality of life drives the state’s property values close to the bottom of the barrel.
CNBC notes that Montgomery has a net negative growth, thanks to its rapidly declining population and more than 25 percent of its residents living in abject poverty.
8. Maryland
If “The American Dream” begins with a starter home, don’t move to Maryland.
According to the OC Today-Dispatch, Maryland is the sixth-worst state to buy a starter home, with less than half of the population being able to afford one thanks to the state’s ridiculously high prices.
9. Oklahoma
Oklahoma may be where the wind comes sweeping down the plain, but life in the Midwest state is anything but a Broadway musical.
WalletHub listed Oklahoma as the seventh-worst state to live in, in terms of quality of life, which makes the state’s property one of the least desirable in the nation to buy.
10. Kansas
For those who want to live a Midwestern type of life, the allure of Kansas cannot be denied. It offers the perfect combination of tranquility and industry, and is considered a hub of “all-American values.”
But while the state’s property remains some of the least expensive to buy, especially for first-time homebuyers, the properties consequently don’t hold their value — and, in fact, the values significantly decrease year-over-year.
11. Pennsylvania
Although Pennsylvania is known for its rolling hills, affordable housing, and one-of-a-kind culture — a unique mix of urban grit and Amish simplicity — Pennsylvania remains one of the worst states to buy property in.
CBS reports that though housing is more affordable due to its residents’ above-average incomes, the steep taxes and wildly fluctuating mortgage rates make buying property a bit of a trap. And if you happen to buy a property in a more economically depressed area of the state — such as those in central Pennsylvania, where the steel mills once reigned supreme — you’re in for a rash of bad luck when it comes to maintaining the property and retaining the value of your home.
12. Illinois
Despite fear-mongering reports, Chicago is a beautiful, thriving city filled with a myriad of economic prospects — but that’s all that Illinois has to offer.
WirePoints notes that Illinois properties are 50th in the nation regarding home value appreciation, which means you will not see a return on your investment quickly — if at all. Unless you’re buying in a high net worth area of Chicago, avoid the state altogether.
13. New Jersey
New Yorkers give their New Jersey neighbors a world of ribbing due to their “bridge and tunnel” behavior — but the razzing should also now include the average resident’s inability to buy a home in the state.
According to Fox 5 New York, New Jersey is one of the worst states for millennials to buy a home in due to the state’s gobsmacking tax rates. (Yes, they’re even higher than New York.) Atlantic City becoming one of the most economically depressed cities in the state doesn’t help the property values, either. (As for why Atlantic City has become so economically depressed, they have a certain ex-president to thank — and those of a certain age in the area will never forget it, either.)
14. Kentucky
The Bluegrass State has undergone a bit of image rehabilitation over the past few years, but its reputation as one of the worst states to buy a property in remains.
Point2Homes conducted a study on the home-buying prospects in the state, and they noted that the state — particularly in the city of Lexington — remains the third-worst market for millennials, thanks to the 13 percent unemployment rate.
15. Iowa
While first-time homebuyers have an easy time buying a property in Iowa due to the state’s low starter home prices, it’s not a good state for anyone else to invest in.
Yahoo! Finance notes that real estate investors tend to avoid investing in multifamily homes in Iowa due to their low resale value and the inability to get a good return on their investment.
16. Indiana
The state that gave the world Mike Pence and the University of Notre Dame (take your pick as to whether these were a net good or a net evil) is also one of the worst states to buy property in.
According to local NBC affiliate WTHR, Henry County is the third-most expensive county in the nation, making home ownership cost-prohibitive for the average buyer.
17. Missouri
The Show Me state has residents asking real estate agents to show them the door.
In addition to being a state with one of the worst qualities of life — thanks to high crime rates, lack of voting and reproductive rights, and floundering workforce — Missouri’s property rates have, consequently, plummeted in recent years, and the state shows no sign of recovery any time soon.
18. Arkansas
Arkansas gave America — and the rest of the world — Bill Clinton, but that’s where its wow factor begins and ends.
According to WalletHub, Arkansas is the third-worst state to live in the country (behind New Mexico and Louisiana) in terms of quality of life, making the state’s property all but worthless — and therefore, not worth buying.
19. Ohio
Ohio’s median home value is significantly less than the national average — and that means it’s one of the worst states to buy a property in.
Cleveland, OH, is listed by NASDAQ as one of the worst cities in the country to buy a home in due to its extreme economic depression and ever-shrinking population. People are fleeing the state in the hopes of better prospects elsewhere, and they’re finding homes difficult to sell as a result.
20. Wyoming
Another state known for its natural beauty is Wyoming, with many of the residents lauding the miles of mountains, lakes, and national parks available for everyone from residents to tourists.
But according to Clever Real Estate, Wyoming’s affordability factor is at 6.4, meaning that it takes almost 7 years for the average person to purchase a house in the state. While the cost of living is certainly low, the economic prospects in the state are at the same level, which doesn’t make it conducive to valuable home-buying.
21. Wisconsin
The land of America’s farms and cheeses has one of the worst housing markets in the country.
According to a report from the Wisconsin Realtor’s Association (via Wisconsin Public Radio), home affordability is the worst it’s ever been since the association first began tracking the prices in 2009.
22. District of Columbia (DC)
“The DC Crowd” may find it a bit humbling (and it’s well-deserved) to know that their district (since, technically, DC isn’t a state) is one of the worst to buy a property in.
A report from WTOP revealed that the housing market is cooling down significantly, with the average house selling for less than its original asking price — marking the first time that this has happened in four years. (In previous years, DC homes — especially those on or near Capitol Hill — were receiving significantly over their asking price, usually after a bidding war.)
23. South Carolina
South Carolina is the home of many popular tourist destinations, including the popular Spring Break destination Myrtle Beach.
However, according to Fox News, Spartansburg is considered the worst place to live in the entire United States — which means that purchasing property in South Carolina, especially in that area, is less than desirable.
24. North Carolina
North Carolina made the list of one of the worst states to buy property in because success in the real estate market is a bit of a dice toss.
While the so-called “triangle” (that is, the Raleigh-Durham-Chapel Hill area) is the least risky area, Charlotte and Winston-Salem are very risky due to the natural disasters and high homeowners insurance rates in the area.
25. New Mexico
While New Mexico has gorgeous Southwest desert weather and incomparable views, its property values are in the garbage — and for good reason.
The quality of life in the state is one of the worst in the country, with high crime rates, extreme poverty, and low education standards driving potential homebuyers away in droves.
How We Compiled This Data
We compiled our list based on data provided by realtors and other housing professionals, cost of living, value of property year-over-year, economic prospects, and other sundry factors.
