Best cities to buy a home in 2012

Zillow analyzed income and home-price data to come up with a list of cities where now is a good time to buy. We've also got a lot of cities where it's still a buyers market.

By Teresa at MSN Real Estate Jun 7, 2012 11:04AM

Grand Rapids, Mich.

©Panoramic Images/Getty ImagesThis year's mixed real-estate statistics serve to remind us that, yes, all real estate is local.

 

Former basket-case cities such as Phoenix and Miami are rising from the ashes, while cities such as Atlanta that initially didn't suffer precipitous drops in property values are continuing to see home prices drop.

 

Zillow looked at several key factors and came up with a list of the places to buy a home in 2012, plus a list of the cities where you can afford to bargain.

 

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To create its list, the real-estate portal looked at housing prices compared with local incomes, home value trends, unemployment rates and whether buying makes more sense than renting.

The top city in Zillow's Best Places to Buy in 2012 was Grand Rapids, Mich., where home values have risen 4.8% since last spring and unemployment has fallen. The median home value in Grand Rapids is $108,000, making homes affordable on the city's median income.

The next two cities were Phoenix, where Zillow predicts home values will rise 6.5% this year, and Pittsburgh. "Phoenix is probably the best example of a hard-hit market that is showing signs of recovery," says Stan Humphries, Zillow’s chief economist.

 

The other cities identified as the best places to buy in 2012 were:

  • Oklahoma City
  • Rochester, N.Y.
  • Dallas
  • Memphis, Tenn
  • Dayton, Ohio

To identify the cities where buyers have the upper hand, Zillow looked at listings with price cuts, median price cuts, foreclosure resales and the difference between list price and sale price.

These are the cities where you are likely to benefit from negotiating on price, but remember that these are averages and that any individual home could be well-priced at listing. Zillow's Best Places to Bargain for a Home are:

  • Rockford, Ill.
  • Punta Gorda, Fla.
  • Cleveland
  • Chicago
  • Sarasota, Fla.
  • New Haven, Conn.
  • Philadelphia
 
124Comments
Jun 16, 2012 9:29AM
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Want to buy a house in Memphis, Tn. ? I've got one for sale. Reason prices are so low here. Let's see... voted most dangerous city in the country, highest property taxes in the state ( and getting ready to be raised again ), corrupt politicians that are only looking to line their own pockets and have no idea how to manage a city, flithy, dirty streets, terrible school sytem and fixing to get worse, property owners footing all the burden as a large number of people here are on welfare and food stamps ( yet drive luxury automobiles ), highest levels of teen pregnancy,stds and illiteracy in the state. I could go on and on but you get idea. I can't out of here fast enough but my property values have dropped so much thanks to all of the above that I doubt I can afford to move.  
Jun 7, 2012 10:26PM
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There are lots of places in the USA to get a very reasonably priced house.  I've done a good bit of research about these placesand their prices.  If I just wanted to have my own house, given my financial circumstances which are modest, I could find several.  However, the locationsof these affordable houses are just not to my liking. From living in places I really hated, I learned that life is too short to be in a location not to one's liking. My thoughts on a house as an investment vehicle to make money differs from lots of folks in this economy.  I want a house I can afford, that I will really enjoy living in, in an area that I like. By the time I get ready to sell, who knows what the market will be, and I won't spend the next years of my life worrying about future housing prices since one of three things will happen: I'll break even; I'll make money; I'll lose money. Housing as an investment is interesting: calculate mortgage, insurance costs, taxes; add up every penny spent on that house: repairs, landscaping, updating, maintenance, moving costs to get to the house; decorating; furniture, etc. Figure in tax savings. Sell the house, subtract all costs, take the net profit and calculate your rate of return over the years you lived in the house. Then you'll know how your investment did.
Jun 7, 2012 10:08PM
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I am interested to settle in Santa Monica or close to it. Any suggestions please. If its a good idea, compared to being in Washington DC. Also how is the job situation there and how safe for college going girls or 'Special' Children.

Would appreciate all information/

Jun 7, 2012 9:53PM
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nothing in california...what a surprise...yeah right...
Jun 7, 2012 8:55PM
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I bought a second home in Casa Grande, AZ about an hour south of Phoenix off the I-10 in April 2011 (THANK GOD) and bought my first home in 2005 as a 23 year old who thought this would be the home I would live in for a long time. Now that home the bank owns. Thanks but no thanks, you can have that home which was at 180% LTV back!
Jun 7, 2012 8:24PM
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Billings, MT - maybe lost 5% during the whole crisis and has gained it back in the past year.  Home builders are going full tilt again.  A great place to live and work.  My home is worth double what I paid for it in 2000.  Not the greatest investment, but could have been worse.  My ex wife took a bath on the two homes she owned in the Sacramento area, hope she recovers.

 

 

Jun 7, 2012 8:11PM
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Aralee H,

 

We're an entitlement society? Gee, I honestly don't see much of that, but there sure is a lot of poverty and homelessness. Unless you're talking about Social Security and Medicare, which help the middle class stay strong and the country from gradually degenerating into a third world people. In general though, there's FAR less of that kind of thing here than in most other civilized western nations. Yes, even with "Obamacare", which is not very socialistic at all, in fact it benefits the industries as well as the people.

But that's all missing the point- which is that your FOX News or whatever "entitlement society" meme isn't even the real problem.

Sounds like you've been herded into the wrong pasture. God help us all if a majority of voters still don't "get it" in November. A little clue, though, hard as it may be for you brainwashed ones to believe, but Obama and the Dems ain't the problem.

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Well, I truly hope that everyone in America is happy as the proverbial pigs in **** (translated: Hedonists left over from the Ronald Reagan Era - kids and grandkids included).

 

Now that said, here's what I have to say. Firstly, I doubt if there is anything in America that I would really want. Having spent my adult years (age 35-69) with my nose day and most of the night in an American History book, all written by TRUTH TELLING Ivy League historians (got my Ph.D. in Biochemistry, my day job), I can safely say three words that I actually mean: PISS ON AMERICA.

 

You all can have it. I plan to take my computer and give it away tomorrow morning. My TV went years ago. And, I haven't read a newspaper since circa 1975.

 

No spelling errors found.   

Jun 7, 2012 7:55PM
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Phoenix???

I am from Phoenix and it is like living in the bowels of hell's inferno.

Jun 7, 2012 7:46PM
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do yourself a great favor and dont move to florida the housing market may be cheap but in the end you will pay for it with the hoa fees as well as the headaches of the housing value. living here in florida is garbage this is my last year here and me and my family is packing up and moving out of this hell hole state there is not one part of this state that is doing any better then the next part of florida the housing market here is not gonna bounceback no time soon!!!!

Jun 7, 2012 7:37PM
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I moved from new Jersey in 2004 I had a mortgage of $1200.00 a month,my taxes were $5000.00 a year,I moved to Sebring Florida,I live in a Golf course community I bought a house from Fannie Mae feb 2011,we paid $85,000. for it it is my dream home 4 bedrooms Granite counter tops,all tile floors,crown molding through out the home,ceiling fans in everyroom,Not braging Just so happy I don't have to pay NJ prices anymore,Best part Florida has Homested my taxes are $500 a year.This house sold for$172,000. in 2007,there are some great deals out there,you just have to look!!!
Jun 7, 2012 7:28PM
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I bought a fannie mae home for 85,000 last sale was 172,00 in 2007 its in Florida Taxes are $500 a year,I am from nj when I left in 2004 my mortgage payment was 12,000 and my taxes were 5000 a year,Love my new home 4 bedrooms Crown molding,Granite countertops,I am staying for Good!!!!
Jun 7, 2012 7:25PM
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Be very careful of zillow. Had dealt with Zillow in trying to buy a home in Tampa area. PLZ read the reports on Zillow and Trulia on the internet. Many, Many complaints.
Jun 7, 2012 7:22PM
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Bowie, Maryland!!!!!!!    I am still happy after 10 years leaving Queens, New York.
Jun 7, 2012 6:32PM
Jun 7, 2012 6:11PM
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Nothing but crime in Maimi, home values not going up anytime soon,  all smoke and mirrors! Do your homework being buying!
Jun 7, 2012 6:01PM
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I'd never ever buy in Rochester.  I was actually going to do that in 2009, until I realized I'd be pizzing my retirement away on property taxes (astronomical!), rules, regulations, and the "progressive" way of life.  I think not. 
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I just bought a house in Phoenix, (mesa) and wow, am I happy!  It was a fannie mae home that was going for 99,000. I put 10,000 down and it appraised for 115,000. It is in a very nice neighborhood with only minimal work needed. I would be able to sell it today for 135,000 or more because the phoenix area market is so competitive. Many homes in this price range are getting multiple bids and driving up the selling price. I am so lucky to have found this when I did. Another month and I would have been out of luck.
Jun 7, 2012 5:43PM
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This is a wierd report: Most all the States are med east to east and south east coast.

Most are moving out of there so go figure.

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