The spring home buying season is well underway, and in some of the country's hottest housing markets, low inventory is sparking bidding wars and driving up prices. But if you're a bargain hunter, a new report shows you might want to consider buying a fixer-upper in the Rust Belt.
In Detroit, the American dream will set you back about $41,500. The Motor City tops RealtyTrac's list of best places to buy a bank-owned home built before 1960.
"We wanted to look at the slice of market that still represents a good bargain for buyers in this environment," says RealtyTrac Vice President Daren Blomquist. He notes a lot of the cities on the list have older distressed housing stock -- and that turns off investors. But, he adds, people drawn to the low cost of living in, say, Cleveland or St. Louis could afford to buy a house and rehab it.
At Oberlin College in Ohio, Economist Ron Cheung cautions bargain hunters to keep in mind, the Rust Belt is still on the mend.
"Each of those cities has to find its way of differentiating itself so as to attract residents that are going to stay there for, for a long time," Cheung says.
He adds buyers should really check out the neighborhood -- things like the crime level and the quality of public schools.
Another indicator? Median home prices should be rising. In that case Toledo, Ohio has the best prospects in the Midwest.
RealtyTrac's 15 Best Cities for Buying Fixer-Upper Bargains (Average Market Value):
1. Detroit, MI ($41,503)
2. Chicago, IL ($71,659)
3. Cleveland, OH ($59,800)
4. St. Louis, MO ($60,556)
5. Cincinnatti, OH ($67,003)
6. Philadelphia, PA ($67,712)
7. Milwaukee, WI ($72,190)
8. Phoenix, AZ ($62,574)
9. Toledo, OH ($54,854)
10. Birmingham, AL ($65,310)
11. Dayton, OH ($57,954)
12. Columbus, OH ($54,600)
13. Jacksonville, FL ($60,557)
14. Indianapolis, IN ($74,005)
15. Lansing, MI ($56,401)