Residential real estate prices in many cities have risen so much that some people who live in them can no longer afford to buy a new house. The influx of new buyers seeking a better lifestyle during the pandemic has spiked demand. Many of these people have moved from ultra-expensive coast cities like Los Angeles, New York and San Francisco. These buyers have been helped by low mortgage rates, and sometimes by the rise in their own investments, often in the stock market. In most cities, mansions cost millions of dollars. In a few cities, that is not true.
Realtor.com defines a mansion as a home that is over 5,000 square feet. The median price of these homes was $1.58 million nationwide in August. That is up 17% from the same month last year. Realtor.com experts pointed out that many of the “low-priced” mansions are in older industrial cities in Midwest and South. Among the 10 cities with the most affordable mansions are Indianapolis, Kansas City and Louisville.
A caution from Realtor.com is that most of the inexpensive large homes in these cities are also old. Buyers can assume that these will require investments to put them into “move-in” condition.
Realtor.com’s just-released study, “Massive Homes, Mini Prices: The 10 U.S. Cities With the Most Affordable Mansions,” lists homes by median price per city and median price per square foot.
The city with the most affordable mansions is Indianapolis, one of the oldest large industrial cities in the Midwest. The city is relatively poor, with a median household income of $49,661, according to the Census Bureau. That is well below the national number. The 15.8% poverty rate is high.
The Indianapolis “mansion” price is $845,000. Many of these homes were built just after 1900, when the city was home to a number of industrialists who ran companies like Eli Lilly.