5 cities where working class families can still find affordable homes
Homebuyers in cities across the U.S. cite affordability as their biggest concern, notes a study from Redfin. But, there’s some good news for working-class homebuyers.
“Across 40 large U.S. cities, 55 percent of homes for sale last month were affordable for a working-class household and still between two and four bedrooms in size. Homes of this size matter because affording a home that’s big enough to comfortably fit a family is more difficult than affording a studio or a one-bedroom condo,” says Redfin.
What Is Working Class?
Working class is a term used to describe workers employed in trade occupations. Historically, these workers wore uniforms, often blue, hence the name blue collar.
But working-class jobs don’t necessarily translate to low-paying jobs, notes a recent Forbes article. Workers who repair and install elevators bring home average annual salaries of $73,560, while transportation inspectors might earn $65,770.
So where, according to Redfin, can a blue collar buyer find affordable homes?
Detroit rated the most affordable with nearly 97 percent of its listed homes large enough and affordable on a working-class household income, followed by Cleveland, Baltimore, Columbus, and Memphis — all of which had over 80 percent of qualifying properties. But in San Francisco, the least affordable city, just 3 percent of these homes were priced within reach of a working-class household, says Redfin.
Here’s a closer look at Redfin’s top 5 affordable cities for blue collar homebuyers — and what those cities offer in employment opportunities today:
1. Detroit, Michigan
2. Cleveland, Ohio
3. Baltimore, Maryland
4. Columbus, Ohio
5. Memphis, Tennessee
- Detroit — Revitalizing Downtown to Attract Business, Residents
During the auto industry’s boom years, Detroit’s population soared to 1.8 million in 1950. Since then, the population has steadily dropped, and homeownership has suffered. According to CoreLogic, 17.8 percent of its homes are still underwater. But recent renovations of downtown historic theaters and entertainment venues, new sports stadiums, and a project to revitalize the riverfront may help turn things around. Kurt Metzger, a demographer with Data Driven Detroit, predicts a population uptick in 2016 thanks to new development and other quality of life improvements. The annual working class household income in Detroit is $52,500, while the median price of a 2- to 4-bedroom home is $41,500, says Redfin.
- Cleveland — Manufacturing Bouncing Back
Cleveland’s growth mirrors the rise and fall of its metal fabrication and chemical and machinery manufacturing industries. The biggest blow to employment came between 1990 and 2010, when manufacturing employment in the region plunged by 45 percent and 203,000 jobs vanished, says Jacob Duritsky, director of a research team at Team NEO. Yet new data suggest manufacturing output is returning to something near 1990 levels and will surpass historic markers. By the year 2020, the value of goods made, stamped, soldered or assembled here will have increased by nearly 40 percent, outpacing the national growth rate, says Team NEO. The annual working class household income in Cleveland is $49,500, while the median price of a 2- to 4-bedroom home is $85,000, says Redfin.
- Baltimore — New Industries, Opportunities
After World War II, laborers flocked to Baltimore to work at Bethlehem Steel, the city’s largest employer. As the steel industry faltered, working class families left. “Baltimore’s stable urban population…migrated to the suburbs and the urban working class dissolved,” according to Baltimore magazine. Today, Baltimore is finding new growth through information technology, healthcare services, and tourism, many of which employ working-class laborers. According to Redfin, the annual working class household income is $70,500, while the median price of a 2- to 4-bedroom home is $170,500, says Redfin.
- Columbus, OH — Highest Paid Hourly Workers
By the 1880s, there were almost 200 factories in Columbus, manufacturing shoes, farm tools, and machinery, among other products. Today, Ohio’s capital offers a diverse employment base. It’s the fifteenth largest city in the country, with a population of 809,798. And it’s a good place for hourly-wage employees to be. The Bureau found that of metropolitan areas with populations of at least 1 million, Ohio’s capital recorded average hourly wage growth of 6.2 percent — the nation’s highest. Redfin says the annual working class household income is $55,000, while the median price of a 2- to 4-bedroom home is $176,200.
- Memphis — New Manufacturing Jobs
Cotton was the predominant driver of the city’s early economic growth. Memphis is also one of the largest shipping hubs in the Mid-South, dating back to the Civil War. Three Fortune 500 companies, FedEx, AutoZone, and International Paper Co. now call Memphis home. These significant businesses are part of the city’s large manufacturing sector, representing about 35 percent of its jobs. The Greater Memphis Alliance for a Competitive Workforce offers training for jobs at companies like Electrolux, Mitsubishi, and Blues City Brewing Co. The annual working class household income is $47,500 while the median price of a 2- to 4-bedroom home is $136,000, says Redfin.
Source: Working-Class Homeownership: Still Possible in Many Big U.S. Cities, by Eric Scharnhorst, published on Redfin August 31, 2016.