Every fall, parents wave goodbye as their college-bound kids pack up their belongings, make the drive down university lane and prepare for football games, mid-terms and freedom. While college living is often associated with dorms and campus housing, many parents are opting to purchase a home rather than spend money on rent or dorm fees. According to a recent survey among network of real estate professionals in college towns, 64 percent see a significant number of “parent investors” buying homes for their kids to live in while attending the university.
To see how college towns stack up in home price affordability, a Home Listing Report (College HLR) has been released which provides the average home listing price of four-bedroom, two-bathroom properties listed for sale between April and September 2010 in markets home to the 120 schools in the Football Bowl Subdivision. With almost two-thirds of the College HLR markets having subject homes priced less than $250,000 (78 in total), college towns prove to be a touchdown for homebuyers.
The top 10 most affordable markets in the college Home Listing Report are:
1. Ball State University, Muncie, Ind. – $105,115
2. University of Buffalo: The State University of New York, Buffalo, N.Y. – $117,223
3. University of Memphis, Memphis, Tenn. – $135,090
4. University of South Carolina, Columbia, S.C. – $137,707
5. University of Akron, Akron, Ohio – $139,711
6. Eastern Michigan University, Ypsilanti, Mich. – $141,629
7. Ohio University, Athens, Ohio – $141,964
8. Kent State University, Kent, Ohio – $153,662
9. University of Toledo, Toledo, Ohio – $155,286
10. Louisiana Tech University, Ruston, La. – $157,110
It appears as though towns that are home to major universities have a special vibe you just don’t find anywhere else. It seems to be about more than just great sports and local flavor. College towns offer rich culture and most have steady economic bases oftentimes highlighted by outstanding medical and research facilities.”
While not all college towns are affordable, even the more expensive markets make great places to live.
The top 10 most expensive markets in the Real Estate College Home Listing Report are:
1. Stanford University, Palo Alto, Calif. – $1,385,652
2. University of Hawaii, Honolulu, Hawaii – $833,439
3. University of California LA, and University of Southern California, Los Angeles, Calif. – $833,087
4. University of Colorado, Boulder, Colo. – $791,877
5. Boston College, Chestnut Hill, Mass. -$791,408
6. United States Naval Academy, Annapolis, Md. – $671,151
7. San Jose State University, San Jose, Calif. – $650,111
8. University of California Berkeley, Berkeley, Calif. – $636,958
9. University of Washington, Seattle, Wash. – $624,338
10. Northwestern University, Evanston, Ill. – $559,855
Additional Survey Findings:
It was also found that college towns have continued to be a hot spot for real estate investing, regardless of the downturn in the economy. Seventy-three (73) percent of real estate professionals surveyed said they see a significant number of investors buying homes near campus and renting them to people in the community, with only 21 percent seeing a decrease in this trend over the past five years.
The survey suggests two types of investors see value in college towns, the “Long-term investors take advantage of the steady stream of renters, including students, professors and university officials. and the ‘Parent investors’ who buy homes for their child to live in while attending college. Roommates provide rental income for the mortgage, and the hope is that students care for the home and it appreciates over time.”
With so many benefits to living in a college town, they aren’t just for investors. Alumni and retirees are finding reasons to re-live their glory days, as well. Fifty one (51) percent of the survey respondents noted they see a lot of alumni homebuyers, and 49 percent see a significant number of retirees moving to their college town.
It appears as though it’s not just students who want to live near campus, attend games and take interesting classes, for a few years now, college towns have been popular markets for alumni and retirees.
The survey of real estate professionals uncovered that a college sports team’s performance affects more than just a football ranking; nearly one quarter (24 percent) of respondents indicated that the success of a college’s sports teams can have an impact on the local real estate market.