Special Report

Cities Where Homes Cost Less Than a Car

5. Warren, Mich.
> Median listing price: $49,900
>Comparably priced car: Lincoln Navigator ($59,900)

>Housing price change (year over year): 6.5%
>Median household income: $46,247
>Unemployment: 9.9%

Chief among several promising housing trends for Warren is a surprisingly low homeowner vacancy rate, which suggests that the town has seen fewer foreclosures than many other cities in Michigan. Still, sales prices have dropped 35% over the past five years in Warren, says Trulia, which suggests that quite a few homeowners are underwater and perhaps holding onto their properties until things turn around.

Also Read: Countries Where People Work Least

4. Redford, Mich.
> Median listing price: $40,000
>Comparably priced car: Ford F-450 ($55,000)
>Housing price change (year over year): 5.2%
>Median household income: $52,573
>Unemployment: 9.9%

Redford is not a large city, but it suffers from problems such as 1-in-159 homes in foreclosure, the worst rate among cities on this list. It also has aging homes, most of which were built just after World War II and may be expensive to maintain. Like Warren, prices have dropped by 38.5% from their peak according to FHFA data. On the bright side, at $52,573 the average annual income in Redford is higher than in many of its neighboring cities on this list.

3. Gary, Ind.
> Median listing price: $39,900
>Comparably priced car: Ford Expedition ($39,900)
>Housing price change (year over year): – 7.5%
>Median household income: $27,367
>Unemployment: 8.5%

In Gary, as in most other troubled housing markets, employment or rather the lack of opportunities holds the key to its housing recovery. The current high unemployment rate is not a blip unfortunately — Gary has 3% fewer jobs than it did a decade ago, according to Trulia. Much of the local population lives at some of the nation’s lowest income levels as 46.5% earn under $25,000 annually according to Census economic data. Such data suggest that local businesses may have trouble leading the city of recession.

2. Flint, Mich.
> Median listing price: $31,950
>Comparably priced car: Chrysler 300 ($31,950)
>Housing price change (year over year): n/a
>Median household income: $28,835
>Unemployment: 8.9%

According to Trulia’s Kolko, both Flint and Detroit experienced significant housing-price declines, not because of overbuilding as in Florida but because of “long-term job decline coupled with declining populations.” Worse, Flint suffers from a significant amount of poverty with about 44% of the population earning under $25,000 a year according to Census economic data.

Also Read: The Most Dangerous Cities in America

1. Detroit, Mich.
>Median listing price: $21,000
>Comparably priced car: Chevy Malibu ($21,000)
>Housing price change (year over year): 5.2%
>Median household income: $29,447
>Unemployment: 9.9%

Detroit’s leaders are committed to reducing spending and creating a more livable and prosperous city for families and businesses of all sizes. The local automotive economy is improving, especially as Chrysler stages a comeback from its near-death experience. Some may interpret a year-over-year housing price increase as a positive sign for Detroit’s future. But unkind economists might call it a dead-cat bounce. Unemployment is not merely high, population is decreasing, and in 2010, one-in-five homes were vacant. Long term, that’s a lot of downward pressure on housing prices.

Rusty Weston

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