5 most and least affordable cities for home buyers

After years of weak housing markets, home sellers are hopeful that this spring’s home-buying season will finally lift prices. In positive news, RealtyTrac reported in March that national foreclosures fell to their lowest levels in five years. Unfortunately, the number of homes that received first-time foreclosure notices also rose 7% in March from the previous month, the third consecutive increase this year.

Like national housing data, the cost to buy a home varies considerably across the country. Working with online real estate listing database Realtor.com, 24/7 Wall St. identified the housing markets with the highest and lowest prices per square foot.

In general, the cities with the lowest real estate prices per square foot were cities that have suffered from poor economic conditions for some time. Many of these cities have begun to see interest from potential homeowners and investors. Others, however, continue to flounder.

The cities with high costs per square foot, for the most part, have wealthier residents. Five of the 10 most expensive cities are also in the top 10 for median income. Five of the least expensive are in the bottom 20 for median income.

Not surprisingly, Detroit’s cost per square foot of $62.45 was the lowest. San Francisco’s cost per square foot of $420.99 was the highest.

Yet, some areas with pricey reputations didn’t make the top five. Manhattan, NY, which is considered one of the most expensive cities in the world, would be at the top of most lists. However, when we looked at the entire New York metropolitan statistical area, which includes eight counties, including New York, Westchester and Queens, the median price went down and the median square footage went up.

A few of the markets with the lowest prices per square feet experienced large declines in home values during the recession. For the most part, however, these are former industrial centers that have been on the decline for years. They include Detroit, Toledo and Wichita.

As would be expected, the cities with the highest and lowest costs per square foot also have the highest and lowest overall median home prices, respectively. Nine of the 10 metro regions with the lowest cost per square foot are among the 15 regions with the lowest median listing price.

24/7 Wall St. relied on Realtor.com’s February figures for the 146 largest metropolitan statistical areas in the country for median listing price and median square footage to calculate the median price per square foot for each MSA. Realtor.com also provided the number of available listings and the number of online property searches for each MSA in February.

Cities with the lowest prices per square foot:

5. Wichita, KS
Price per sq. ft.: $69.04
Median list price: $129,900 (11th lowest)
Median square feet: 1,882 (29th highest)
Search rank (out of 146): 96th

The median square footage of a listed Wichita property is 1,882, the 29th largest in the country. The median list price, however, is just $129,900, the 11th-lowest price in the U.S. During the recession, home values dropped just 2%, one of the smallest declines in the country. The unemployment rate in the region is 7.7%, well below the national average. Nevertheless, property remains extremely cheap in the region. There has been some interest in Wichita real estate. It ranks in the middle of Realtor.com’s measure of the most searched-for real estate markets, and home prices climbed by more than 3% between February 2011 and February 2012.

4. Indianapolis, IN
Price per sq. ft.: $68.56
Median list price: $133,000 (13th lowest)
Median square feet: 1,940 (21st highest)
Search rank (out of 146): 55th

Properties in the Indianapolis metropolitan region are among the largest in the country at a median 1,940 square feet. However, the median listing price in the area, according to Realtor.com, is just $133,000, the 13th lowest in the U.S. These low costs, along with better-than-average unemployment, have led to some increased interest in the city’s real estate. Median list prices climbed 6.4% in the past recorded year, and inventory fell by more than 18% over the same period.

3. Toledo, OH
Price per sq. ft.: $67.02
Median list price: $100,000 (3rd lowest)
Median square feet: 1,488 (13th lowest)
Search rank (out of 146): 117th

Like Dayton, Toledo was once one of America’s largest industrial centers and has fallen on hard times in the past several decades. Poverty and unemployment are both extremely high in the region. Median income is the 14th lowest among the cities on our list. Median property listings are just $100,000 in the region, according to Realtor.com. This is the third-lowest price in the country, amounting to $67.02 per square foot. Nevertheless, there has not been much interest in Toledo property, as it ranks 117th out of 146 on Realtor.com’s most-searched-for list. Median list prices fell by 4.31% between January and February of this year, the second-biggest decline among the regions examined.

2. Fort Wayne, IN
Price per sq. ft.: $66.03
Median list price: $104,900 (4th lowest)
Median square feet: 1,580 (24th lowest)
Search rank (out of 146): 76th

Property costs, according to Realtor.com, are the second-lowest in the country in Fort Wayne at $66.03 per square foot. Prices, however, have begun to recover in the region. Between February 2011 and February 2012, the median list price increased by more than 5%. However, in the past recorded month, property values fell by 2.78%, the fourth-worst decline in the country among the 146 regions studied.

1. Detroit, MI
Price per sq. ft.: $62.45
Median list price: $84,900 (the lowest)
Median square feet: 1,360 (5th lowest)
Search rank (out of 146): 2nd

Photo: Bob Jagendorf / Flickr

Detroit was one of the hardest-hit cities by the recession. The city had already been undergoing several decades of severe economic drought. Home prices still fell by 54.9% from their prerecession peak. The city’s unemployment rate has declined in the past year, but it remains in the double-digit range and is still among the worst among major U.S. cities. Apparently, however, speculators see a silver lining in the Motor City, or at the very least, a bottom in the housing market. In February, only one city (Chicago) among the 146 measured by Realtor.com, had more searches for property than Detroit. This may have something to do with the fact that the median list price in the region was just $84,900 in February, or $13,600 less than the next-highest city.

Cities with the highest prices per square foot:

5. Jersey City, NJ
Price per sq. ft.: $299.90
Median list price: $299,900 (22nd highest)
Median square feet: 1,000 (the lowest)
Search rank (out of 146): 119th

Cost per square foot in the Jersey City area is the fifth-highest in the country. The reason for this is that while median list price is just shy of $300,000, the average size of listed properties is only 1,000 square feet — the lowest among the largest housing markets examined. Demand for homes and apartments in the city has been extremely limited. The region’s Realtor.com search rank is 119, which is the 28th lowest among the 146 markets examined.

4. San Jose, CA
Price per sq. ft.: $315.96
Median list price: $468,888 (3rd highest)
Median square feet: 1,484 (12th lowest)
Search rank (out of 146): 60th

San Jose’s unemployment rate in January 2011 was 10.8%. By January of 2012, the unemployment rate had dropped to 9.1%. While unemployment in San Jose is still above the national average, the improvement was one of the biggest among the country’s major housing markets. That recovery in the region’s economy is reflected in housing demand and prices. Median list prices in the past 12 recorded months jumped by 7.9%. Between January and February alone, those prices increased by 4.2%, the largest growth in the country during that time.

3. Washington, DC
Price per sq. ft.: $372.11
Median list price: $384,950 (9th highest)
Median square feet: 1,034.5 (3rd lowest)
Search rank (out of 146): 86th

Washington, D.C., has had a major period of housing price growth in the past year. The median value of listed properties in the capital region increased by 4.17% between January and February alone, the second-largest increase in the country. Over the past 12 months, prices have gone up by an astounding 18.45%. During the recession, the region lost only a small percentage of its jobs and is projected to recover nearly three-quarters of the lost positions by the end of this year.

2. Honolulu, HI
Price per sq. ft.: $381.03
Median list price: $450,000 (4th highest)
Median square feet: 1,181 (4th lowest)
Search rank (out of 146): 120th

The unemployment rate in Honolulu, Hawaii, is just 5.7%, which is well below nearly every other major housing market in the U.S. The Hawaiian capital has a median list price of $450,000, the fourth highest in the country. Median list prices have increased by 7.14% over the past 12 recorded months and have been flat in the past month. The number of homes available on the market has fallen sharply, which has helped keep prices high. Between February 2011 and February 2012, the total number of listed properties fell by 13.8%.

1. San Francisco, CA
Price per sq. ft.: $420.99
Median list price: $611,700 (the highest)
Median square feet: 1,453 (9th lowest)
Search rank (out of 146): 45th

Photo: Billy Gast / Flickr

Of the 146 housing markets examined by Realtor.com, there are none as competitive — or expensive — as San Francisco’s. Median price of listed properties in the area is an astounding $611,700, which is more than $100,000 greater than the next-most expensive region, Santa Barbara. Median list price was up by 3.77% between January and February, the fifth-largest increase in the U.S. While San Francisco’s housing market is only the 92nd largest, it was the 45th most popular real estate search in February.