There are many factors to consider when buying a home, and evaluating factors such as cost of living, crime rate, climate change, local issues, and property taxes can help you save money. Whether you’re saving for a house, waiting mortgage rates fall or plan a big move in the next few years, researching the market now can help you decide where to invest later.
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“While no one can predict the market with absolute certainty, the patterns we are seeing now offer some valuable clues,” he said. Yawar Charliedirector of real estate for the Aaron Kirman Group at Christie’s International Real Estate and a cast member on CNBC’s “Listing Impossible.”
Based on current market trends, GOBankingRates spoke with experts who shared which states should be avoid buying property in the next five years and why.
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California
Stunning scenery, a vibrant culture, and near-perfect weather make California so appealing, but affordability is an issue.
“As a real estate agent in Los Angeles, I’ve noticed some trends that suggest certain states may become less attractive to homebuyers over the next five years,” Charlie told us.
“It’s not just the high cost of living here that’s a problem. The state also faces issues like wildfires and droughts, which can make homeownership even more challenging and expensive,” she explained.
“Additionally, the technology boom, especially in areas like the Bay Area, has driven housing prices to astronomical levels, leading many to seek refuge in more affordable states.”
Rachel Stringer, Realtor at Raleigh Realtyadded: “Demand continues to outstrip supply, keeping inventory drastically low.
“This supply crunch, coupled with slow wage growth, raises affordability concerns over time,” she explained. “As costs rise faster than incomes, keeping up with mortgage payments can become increasingly difficult.”
Explore more: Cheapest Places to Buy a House in Every State
Florida
For many retirees, Florida is a sunny paradise, but a strong storm can quickly turn things into a nightmare.
“The state’s location makes it extremely vulnerable to hurricanes and sea level rise caused by climate change,” Stringer told us.
“Serious considerations include reconstruction costs, outages and increased insurance premiums due to storm damage. Coastal properties could lose substantial value if they become uninhabitable due to sea level rise.”
Illinois
Known for its large cities and extensive farmland, Illinois is a major production center for food, chemicals, rubber products, and more. According to Charlie, however, the state is in trouble.
“Illinois, and specifically Chicago, faces significant financial problems,” he said. “The state has some of the highest property taxes in the country and Chicago faces a high crime rate and budget deficits, leading to cuts in essential services and tax increases.
“These financial hardships make it difficult for residents to justify staying when they could find a safer and more financially stable environment elsewhere.”
Louisiana
With its reputation for good times, delicious food and rich culture, Louisiana is a state people cherish. However, according to Tony Mariotti, founder of RubyHomeyou may want to rethink real estate investments there.
“Louisiana is highly susceptible to the impacts of climate change, such as hurricanes and flooding. These risks can lead to higher insurance costs and potential property damage,” he said.
“The state also struggles with lower job growth and economic diversification, making it less attractive for long-term investment. Infrastructure issues add to property challenges here.”
New Jersey
New Jersey is another East Coast state you should avoid when buying property.
“In addition to high property taxes, New Jersey is experiencing an exodus of large corporations, which is affecting job availability,” Charlie explained.
“The state also has some of the highest health insurance premiums in the country, adding another layer of financial stress for residents. Additionally, congestion and traffic, especially for those commuting to New York, can be a daily frustration.”
new York
Another state with infamous prices is New York, which Charlie revealed has major problems beyond the cost factor.
“In addition to the high property taxes and cost of living in New York City, there is also the issue of aging infrastructure,” he noted.
“The metro system, for example, has been notorious for delays and breakdowns, making daily commuting a headache. Additionally, the pandemic has shifted many jobs to remote work, reducing the need to live in or near the city and prompting many to move to suburban or even rural areas.”
West Virginia
West Virginia is known as coal country, but the industry is in decline, which has “economically devastated many parts of it,” Stringer said.
“As jobs dry up, the population declines in these small towns, leaving little demand for housing. Homeowners may have difficulty finding buyers willing to pay a fair price.”
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This article originally appeared on GOBankingRates. with: 7 worst states to buy property in the next 5 years, according to real estate agents
