10 Cities with the Cheapest Home Prices in the U.S.

House prices are one of the most important economic indicators of a country’s prosperity. Because owning your own home is often seen as a life goal, it serves as a gauge for how well off people perceive themselves to be. In addition, the housing market comprises a major portion of any country’s economy: Not only is it essential to driving the demand of building materials and construction companies, but it also helps fuel home improvement stores and appliance manufacturers, among other types of companies.

Coldwell Banker recently completed its survey of house prices, looking at more than 1,900 different locations in the United States. The company found that the average price of a four-bedroom, two-bathroom home in the U.S. was just more than $300,000. Keep in mind, however, that since some homes are far more expensive, the median price is likely to be considerably lower.

The company also uncovered trends in house pricing that have to deal with regional variance. California appears to be the most opulent state in the union, holding all of the top five locations as well as the majority of the top 25. Meanwhile, the Midwest was the cheapest region overall, laying claim to more than half of the 25 least expensive markets. Let’s take a closer look at some of those least expensive communities. Here’s a list of the 10 cheapest cities in the U.S. where you can purchase a home, according to Coldwell Banker’s data.

10. Kankakee, Illinois

We start our journey in the Midwest — namely in Kankakee, Illinois, a city located south of Chicago in the northeast part of the state. In Kankakee, the average house price on listings was $103,187, making this metropolitan area — if it can be called that — a fine place to settle down if you’re looking for a cheap place to find a dream home.

9. Buffalo, New York

Moving to the Northeast, we check in with Buffalo, New York, where the average house price listed is slightly more than $101,000. If you’re looking to get a job in Labatt’s corporate headquarters, it won’t cost you that much to pick up a house in the area. And, while you’re at it, you’re only a short stop from Niagara Falls, as well.

8. Moberly, Missouri

Going back to the Midwest, we set our sights on Moberly, Missouri, the first spot to come in at under $100,000, barely making the threshold. If you’re looking for a small town in which to settle down, or you want to live where Gen. Omar Bradley grew up, then Moberly could just be the spot that you’re looking for.

7. Jonesboro, Georgia

The closest town to the main plantation that is supposedly the setting of Gone With the Wind, Jonesboro can offer other reasons to attract your attention. The average house price in the city is listed at $98,332, a good deal for this part of the country.

6. Sioux City, Iowa

Sioux City, Iowa, takes the No. 6 spot on our list, with a mean listing price of $97,969. A repeat contender for awards such as the best place to locate a business, the best place to live, and the best emerging economic area in the country, Sioux City just might be a great place to invest by purchasing a house while prices remain low.

5. Jackson, Mississippi

Electrical equipment manufacturing and food processing are two of the major industries in Jackson, Mississippi, a city where the average listed house price was just $94,155. As the first city under $95,000 on our list, the capital of Mississippi offers a compelling case for why it has been continually ranked on lists of the most affordable places to live in the country.

4. Saginaw, Michigan

Next up, we turn our sights to Michigan, specifically Saginaw, a city of some 50,000 people in the state’s bay area. With an average house price of just more than $87,000, the city is a significant step down from the previous entry on our list. The decline in house prices in the region has accompanied the downfall of heavy industries that has plagued Michigan’s economy over the past couple of decades.

3. Flint, Michigan

Staying in Michigan, we check in with Flint, a city where the average house price is just $84,437. The hometown of filmmaker Michael Moore, Flint retains a strong presence of the automotive industry, which once formed the backbone of a flourishing metropolis in what is now held to be a struggling metropolitan area.

2. Garfield Heights, Ohio

We don’t have to travel far to get to the No. 2 spot on our list, Garfield Heights. This suburb of Cleveland has a mean listing price of $66,075, meaning that it’s not hard to find houses there on the cheap. Again, though, as with many areas near the top of the list, if you’re getting what you pay for, the house might not exactly live up to your dream home standards, especially given the nature of many neighborhoods in the area.

1. Cleveland, Ohio

It would be ironic to say that a new reason why Cleveland rocks is that it’s at the top of our list. With an average home price listed at $63,729, the home of the Rock and Roll Hall of Fame takes the gold medal as the most affordable place in the country to pick up a new house. Again, though, buyer beware, as many of the homes for sale that drag down the price are probably far from the quaint pictures that you have in mind.

For more information contact:

Jerry Gusman, The Gusman Group

(888) 213-4208

Mortgage Collectors Silence Homeowners with ‘Gag Orders’

A curious piece of text is appearing in some homeowner's loan modification agreements—by accepting a modification from the bank or non-bank servicer, the homeowner agrees to never publicly say, write, or post anything negative about the company doing the modification.

As originally reported by Reuters, Ocwen, Bank of America, and PNC Financial Services Group are adding new terms to their modification contracts to prevent homeowners from publicly disparaging the companies as part of a mortgage modification agreement.

Essentially, the gag orders are being used when distressed homeowners use litigation to resolve foreclosure and loan modification cases, making the modification contingent upon a homeowner's silence. The deal often extends to lawyers handling litigious cases on behalf of the injured parties.

Reuters cited, "A 2013 report by the National Consumer Law Center found that servicers routinely lost borrowers' paperwork, inaccurately input information, failed to send important letters to the correct address—or sometimes just didn't send them at all."

"These clauses can hurt borrowers who later have problems with their mortgage collector by preventing them from complaining publicly about their difficulties or suing, lawyers said. If a collector, known as a servicer, makes an error, getting everything fixed can be a nightmare without litigation or public outcry," Reuters noted.

According to the original report, the restrictive text is also now showing up when servicers grant regular modifications outside of the courtroom.

These new requirements are creating problems for homeowners—and ire from regulators. New York's Superintendent of Financial Services Benjamin Lawsky said he is investigating Ocwen's use of these clauses.

"Reports that Ocwen is imposing a gag rule for certain struggling homeowners—preventing them from criticizing the company—are troubling and deeply offensive," said Lawsky in an emailed statement to Reuters. "We will investigate this issue immediately."

PNC's vice president of external communications, Marcey Zwiebel, told Reuters that "these clauses are part of the consideration we receive for agreeing to settle the case. This helps to ensure that the discussion is not re-opened in public after the case has been settled."

Modifications still play an important role in the ongoing housing recovery. According to the U.S. Department of the Treasury, 1.3 million loan modifications have been completed under the Home Affordable Modification Program (HAMP). Servicers have completed an additional 5.6 million modifications.

"The banks are attempting to hold our clients hostage with a provision they know we cannot agree to," said University of Notre Dame law professor Judith Fox to Reuters, who runs a clinic for troubled homeowners and who has also petitioned the Indiana Bar Association over attempts to muzzle attorneys. "It is coercive and unethical."

For more information contact:

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

Home Flippers See Impressive Gains in 2013

Home flippers reported more gains in 2013 than in any year on record, according to national real estate brokerage Redfin. The average home flipped last year was sold for $90,200 more than it was purchased, and in 11 of the 30 markets Redfin analyzed, flippers received gains of more than $100,000 per house. Redfin considers flipping the act of purchasing and then reselling a home within 12 months.

Seven of those 11 markets were located in California with San Francisco topping the list. In San Francisco, the average gain from a home flipped was $194,600. Long Island, New York, and San Jose, California, ranked second and third with gains of $152,500 and $152,000, respectively.

On a more micro level, Redfin found homes flipped in nine neighborhoods broke $200,000 in gains in 2013. In the Petworth neighborhood of Washington, D.C., the average home flipped brought a gain of $312,400. In the Beaumont neighborhood of Portland, the average gain on a flipped home was $285,600.

On the other hand, homes flipped in Las Vegas had average gains of $50,200, and homes flipped in Atlanta had average gains of $53,000.

“It’s worth noting that gains are not profits,” Redfin stated in its report. Home flippers often complete repairs and improvements before reselling homes, and these projects vary widely in price.

While home flippers experienced greater gains in 2013 than in years prior, the actual number of homes flipped was smaller last year than in 2012. In Redfin markets, a total of 67,000 homes were flipped last year, and the number is expected to decline to about 58,500 this year. This is down from 75,000 in 2012 and from a peak of 101,800 in 2005.

However, as the number of homes flipped declined, the rate of homes flipped for more than their purchase price increased. Last year, 77 percent of homes flipped recorded gains. In 2008, it was close to the reverse, according to Redfin.

Another trend Redfin pointed out is a heightened number of homes flipped by banks instead of individuals since the housing crisis. After a low of 6.5 percent in 2006, bank-flipped homes shot up to 72.2 percent of flipped homes in 2008.

By 2013, the share had fallen to 35.2 percent, but Redfin has already noted increased activity from banks so far this year.

Redfin also noted increasing flipping activity in a few markets, in particular, Washington, D.C., Atlanta, Fort Lauderdale, West Palm Beach, and Philadelphia.

For more information contact:

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

Home Prices Fall Short of Market Expectations

Annual home price gains pulled back sharply in April, falling short of market expectations, a report released Tuesday shows.

In its latest S&P/Case-Shiller Home Price Indices report, S&P Dow Jones Indices recorded an annual price increase of 10.8 percent among both the 10- and 20-city composites. Those figures compare to year-over-year increases of 12.6 percent and 12.4 percent, respectively.

A consensus of economists surveyed by Econoday called for a gain of 11.4 percent in the 20-city index.

Of the 20 cities tracked, 19 posted lower annual appreciation in April than in March, S&P Dow Jones reported, with only Boston coming out ahead.

"Last year some Sunbelt cities were seeing year-over-year numbers close to 30 percent, now all are below 20 percent: Las Vegas (18.8 percent), Los Angeles (14.0 percent), Phoenix (9.8 percent), San Diego (15.3 percent), and San Francisco (18.2 percent)," said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. "Other cities around the nation are also experiencing slower price increases."

Monthly numbers looked slightly more encouraging: In April, the 10- and 20-city composites posted respective increases of 1.0 percent and 1.1 percent, accelerating over March. Out of the 20 cities surveyed, all reported month-over-month appreciation.

Though most markets nationwide still have some ground to make up before they return to their former peaks, higher costs and tighter credit have made it more difficult for some groups of buyers to reclaim their role in the market.

"First time buyers are not back in force and qualifying for a mortgage remains challenging," Blitzer said. "The question is whether housing will bounce back before the Fed begins to tighten sometime next year."

Recent numbers may indicate a little bit of hope on that front: On Monday, the National Association of Realtors reported a 4.9 percent month-over-month increase in existing-home sales in May—the strongest monthly increase since 2011—while the Census Bureau recorded an 18.6 percent spike in new home sales on Tuesday.

For more information contact:

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

Home Owner Equity Gains Since Q1 2012

The median home price increased nearly 21% over the two-year period ending in the first quarter of 2014. Price gains were particularly strong in markets that experienced a sharp downturn during the recession, including markets in Arizona, California, and Nevada. Homeowners who purchased in advance of this change benefited greatly.

For a homeowner who purchased two years ago, the price appreciation coupled with principle payments has added significant equity to their property. Not surprisingly, the average owners in higher-priced markets gained more in absolute terms because of the price appreciation on what was already a high priced asset. The decline in distressed share played a role as well, but the gains are significant regardless. The buyer of a median priced home in San Jose has gained nearly $300,000 in equity over this 8-quarter period while the gains in Boulder and Orlando were more than $50,000.

Curious how your market has fared? For more information on recent trends in your state, see the Local Market Reports for the first quarter of 2014.

For more information contact:

Jerry Gusman, The Gusman Group

(888) 213-4208

5 Ways To Chase Away Home Buyers!

CoreLogic: 300,000 homes return to positive equity But does this mean more borrowers will move?

More houses are moving into positive equity as home prices continue to rise and push homeowners out of the water.

CoreLogic’s latest report found that 300,000 homes returned to positive equity in the first quarter of 2014, bringing the total number of mortgage residential properties with equity to more than 43 million.

“Prices continue to rise across most of the country and significantly fewer borrowers are underwater today compared to last year,” said Anand Nallathambi, president and CEO of CoreLogic.

To put this into numbers, approximately 6.3 million homes, or 12.7% of all residential properties with a mortgage, were still in negative equity as of first quarter 2014 compared to 6.6 million homes, or 13.4% for the fourth quarter of 2013.

Year-over-year, the negative equity share was 20.2%, or 9.8 million homes in the first quarter of 2013.

“Despite the massive improvement in prices and reduction in negative equity over the last few years, many borrowers still lack sufficient equity to move and purchase a home,” said Sam Khater, deputy chief economist for CoreLogic. “One in five borrowers have less than 10% equity in their property, which is not enough to cover the down payment and additional costs associated with a conventional mortgage.”

As a whole, for the homes in negative equity status, the national aggregate value of negative equity was $383.7 billion at the end of first quarter 2014, down $16.9 billion from approximately $400 billion in the fourth quarter 2013.

But despite more borrowers being in a healthy position, approximately 10 million still have less than 20% equity.

“Borrowers with less than 20-percent equity, referred to as “under-equitied,” may have a more difficult time refinancing their existing home or obtaining new financing to sell and buy another home due to underwriting constraints,” the report said.

Under-equitied mortgages accounted for 20.6% of all residential properties with a mortgage nationwide in first quarter 2014, with more than 1.5 million residential properties at less than 5% equity, referred to as near-negative equity.

Properties that are near-negative equity are considered at risk if home prices fall.

Although, home prices have recorded 26 months of consecutive year-over-year increases, CoreLogic’s most recent home price index said. 

For more information contact

Jerry Gusman, The Gusman Group

888-213-4208