These Suburbs Near Big Cities Provide Housing ‘Bargains’

The Juice regularly reports and analyzes the many conundrums current and prospective homeowners face into today’s insane real estate market. At times, it can feel like everybody has a problem with housing in 2023. Be it homeowners who feel trapped by low-interest mortgages taken out back in the day or, on the flip side, renters who remain on the sidelines due to prohibitive interest rates that continue to hover around 7%. Then there’s constrained supply and still super-high prices despite the rose-colored talk of a housing market cooldown.

The dual reality facing many people these days is this: 

• They can’t afford the $2,589 monthly payment on a $436,800 median-priced home in America, assuming 10% down and a 6.9% interest rate. A monthly payment that requires a salary north of $103,000 to be considered affordable and doesn’t even include taxes, insurance, other fees and maintenance. 
• To achieve affordability they need to move to the country, a far-flung suburb or a city or town that’s too small to fit their needs and taste. Like Toledo, Ohio, where, as The Juice noted the other day, you can secure a sub-$1,000 monthly mortgage payment.

Enter Suburbia

It’s the American way. Always has been. Flee to suburbia, not only for more affordable housing, but more space, inside and outside of the home. However, the suburbs, particularly ones within spitting distance of big cities, aren’t cheap. 

That said, they still can be cheaper. Not cheap. But less expensive than the big city or cities they’re near. 

Point2 conducted a study where they looked at the 777 suburbs just outside the country’s 20 largest and most expensive cities for housing. The usual suspects appear on the 20 largest and most expensive list, ranging from #1 Irvine, CA, with its median home price of $1,376,990 to #20 Sacramento at $452,500. In between you find lots of cities in California, plus New York, Miami and Boston, among others. 

Some of the key findings:

• Price per square foot comes in lower in 603 of the 777 suburbs located within 30 miles of the big and expensive cities. 
• In 11 suburbs, you’ll spend 60% to 65% less per square foot than in the city. 
• 67% of these suburbs boast median prices 50% to 59% less than the city. 

Specifically, the best suburban deal on a percentage basis is Medley, Florida, just outside of Miami. Square footage costs 65% less in Medley than Miami. From a raw dollar standpoint, you’ll spend $401 less per square foot in Novato, CA, than you will in San Francisco. 

Other potentially attractive standouts:

• Emerson and Lodi, NJ, and Mount Vernon, NY are all 62% less expensive than New York City. 
• Passaic and Paterson, NJ, are 60% less expensive than NYC. 
• Boulevard Park, WA is 61% cheaper than Seattle. 
• Lawrence, MA is 60% less expensive than Boston. 
• You’ll find a ton of relatively affordable suburban enclaves on the outskirts of Washington, D.C. Places like Huntingtown and Waldorf, MD (62% less) and Dumfries, VA (58% less). 

Doesn’t make these suburbs cheap by any means. It just makes them less expensive in a housing market where buyers have been forced to redefine the words “deal,” “bargain” or even “steal.” 

The Bottom Line: For some people home ownership dreams have been dashed. Temporarily and maybe even for good. For others, sitting on the sidelines might mean they’re just a few bucks short or a few nights of sleep uncomfortable with what they’d have to pay for a house. 

If you’re on the sidelines, you might have options. Maybe it’s Toledo or places like it where you can live like a king on decent or better money. Or maybe it’s the few hundred dollars’ difference in price square foot between the city and one of its surrounding suburbs. Cast a wider net and you might open yourself up to a world of opportunity.

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