Home prices have increased nationally in the United States, but the cost of living in some states has risen so much that experts recommend against buying property in those places for the next five years.
Personal finance website GoBankingRates recently published a report where it spoke with real estate experts who made recommendations on states where hopeful buyers should not purchase a home within the next five years. These suggestions are due to several factors, including cost of living, property taxes, and local issues.
We also listed the median wage and home prices in each area, gathering data from Forbes and Redfin.
States To Avoid Buying Homes Within the Next 5 Years
California
Median Home Sale Price: $860,500
Year-over-Year Home Price Increase: 9.8%
Median Salary: $73,220
The high cost of living in California, the state also suffers from wildfires and droughts, making homeownership more expensive, Yawar Charlie, estates director of Aaron Kirman Group at Christie's International Real Estate and cast member of CNBC's "Listing Impossible" told GoBankingRates.
In addition, Charlie also noted that the tech boom in the Bay Area and other locations in California has driven home prices up.
Florida
Median Home Sale Price: $420,700
Year-over-Year Home Price Increase: 3.3%
Median Salary: $55,980
While Florida is an attractive place for retirees, the state is vulnerable to hurricanes and rising sea levels. These could cost homeowners hundreds to thousands of dollars in rebuilding as well as insurance premiums.
Illinois
Median Home Sale Price: $301,900
Year-over-Year Home Price Increase: 7.4%
Median Salary: $63,930
Charlie noted that Illinois has experienced significant financial woes, including high property taxes and budget deficits. This means some essential services may have experienced budget cuts.
Louisiana
Median Home Sale Price: $263,900
Year-over-Year Home Price Increase: 2.6%
Median Salary: $50,940
Louisiana is susceptible to climate change, with homes at risk of getting damaged by hurricanes and flooding. This means homeowners would likely experience higher insurance costs.
New Jersey
Median Home Sale Price: $536,200
Year-over-Year Home Price Increase: 12.2%
Median Salary: $70,890
New Jersey homeowners have high property taxes. The state is also suffering from an exodus of major corporations, which affects the job availability in the area. Furthermore, the state has some of the highest health insurance premiums in the US.
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