The 5 US states to avoid buying property in the next five years
When purchasing a home, several factors come into play. Assessing aspects such as cost of living, crime rate, climate change, local challenges, and property taxes can lead to significant savings. Whether you're setting aside money to buy a house, holding off for lower mortgage rates, or planning a relocation in the coming years, exploring the market now can guide your future investment choices. 'While no one can predict the market with absolute certainty, the patterns we’re seeing now offer some valuable clues,' said Yawar Charlie, estates director of Aaron Kirman Group at Christie’s International Real Estate and cast member of CNBC’s 'Listing Impossible.' GOBankingRates consulted experts, based on current market conditions, to determine which states should be avoided for property purchases in the next five years and the reasons behind it.
Florida: The Sunshine State is often seen as a sunny retreat for retirees, but one severe storm can quickly change that. Rachel Stringer, a Realtor at Raleigh Realty, explained: 'The state’s location makes it extremely vulnerable to hurricanes and rising sea levels driven by climate change.'
'Serious considerations include rebuilding costs, disruptions, and escalating insurance premiums due to storm damage. Coastal properties may lose substantial value if they become uninhabitable due to rising sea levels,' she added.
California: With its breathtaking landscapes, lively culture, and almost perfect weather, California is undeniably attractive, but affordability poses a significant challenge. When asked about California, Yawar Charlie said: 'As a real estate broker in Los Angeles, I’ve observed some trends that suggest certain states might become less attractive for homebuyers over the next five years.'
'It’s not just the high cost of living here that’s a problem. The state also struggles with issues like wildfires and droughts, which can make homeownership even more challenging and expensive,' he added.
New Jersey: Another state you might want to reconsider when buying property is New Jersey. 'Besides the high property taxes, New Jersey is dealing with an exodus of major corporations, which impacts job availability,' Charlie explained.
He added: 'The state also has some of the highest health insurance premiums in the country, adding another layer of financial stress for residents. Furthermore, the congestion and traffic, especially for those commuting into New York City, can be a daily frustration.'
New York: The Empire State, another state known for high property prices, also faces other significant challenges. 'Beyond the high property taxes and cost of living in New York City, there’s also the matter of aging infrastructure,' Yawar Charlie noted.
'The subway system, for example, has been notorious for delays and breakdowns, making daily commutes a headache. Plus, the pandemic has shifted many jobs to remote work, reducing the need to live in or near the city and prompting many to relocate to suburban or even rural areas,' he explained.
Illinois: Famous for its big cities and sprawling farmland, Illinois plays a key role in manufacturing food, chemicals, and other products. However, according to Charlie, 'Illinois, and specifically Chicago, faces significant financial woes.'
He explained: 'The state has some of the highest property taxes in the country, and Chicago is grappling with a high crime rate and budget deficits, leading to cuts in essential services and increased taxes. These financial strains make it difficult for residents to justify staying when they could find a safer and more financially stable environment elsewhere.'
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