Small Town Real Estate Prices: Rivaling Big City Markets
The appeal of small-town living, often portrayed as a peaceful and budget-friendly alternative to bustling city life, seems to be losing its edge — at least when it comes to housing costs. As the price tags of homes in many small towns across the U.S. skyrocket, it’s clear that rural living can be just as pricey, if not more so, than owning property in the nation’s largest metropolitan areas.
This shift raises questions: Is small-town living truly an affordable alternative? Or are these seemingly idyllic locations now reserved for the wealthier population? By delving into the home values of micropolitan areas (towns with populations between 10,000 and 50,000) across the U.S., the data tells a surprising story.
Towns Where Home Values Rival Major Cities
According to the most recent data from the U.S. Census Bureau, several small towns have caught up to or even surpassed the median home values in America’s largest metropolitan areas.
Let’s break down the data for the top three small towns and compare them with their metropolitan counterparts.
Vineyard Haven, MA tops the list as the most expensive town, with a median home value just shy of $1 million. To put that into perspective, owning a home here is almost as expensive as in San Francisco, one of the costliest cities in the U.S. Jackson, WY, and Breckenridge, CO, follow closely behind with values that rival those in Los Angeles.
Home Value-to-Income Ratios: Stretching Budgets
While home values in these towns are comparable to large metros, one significant difference remains — median household incomes.
In small towns, the disparity between home values and household incomes is stark. For example, in Vineyard Haven, the median home value is over 10 times the median household income, making homeownership difficult for many locals. In Jackson and Breckenridge, residents face similar challenges, with home value-to-income ratios of 8.27 and 7.55, respectively. This means that while these towns may offer the allure of a quieter, small-town life, the financial burden of purchasing a home is significant.
Why Are Small Towns So Expensive?
The rise in home prices in small towns can be attributed to several factors, and not all of them are unique to these areas.
Affluent Buyers
Many of the most expensive towns, like Jackson and Breckenridge, are vacation destinations for the wealthy. These affluent buyers, often making their income elsewhere, have no problem purchasing second or third homes in these picturesque locations, driving up the prices for everyone else. The limited housing supply in such areas further exacerbates this trend, making it hard for local residents to compete.
Lack of Housing Supply
Even in small towns that aren’t vacation hotspots, home prices can still be high due to a lack of housing development. Rural areas often see little new construction because it’s cost-prohibitive for builders. This results in a limited housing inventory, causing buyers to bid against each other for the few homes available, pushing prices up.
In some cases, real estate in towns like Vineyard Haven has become almost unattainable for the average family, particularly when compared to incomes in the area.
More Affordable Towns: A Silver Lining
Not all towns featured in this analysis are out of reach. While not inexpensive, some towns have a home value-to-income ratio below 3.5, making them significantly more affordable for local residents compared to towns like Vineyard Haven or Jackson.
Final Verdict: Is Small-Town Living Worth the Cost?
As small towns across the U.S. see rising real estate prices, it’s clear that the traditional notion of affordable, small-town living doesn’t always hold true. The allure of the town-and-country lifestyle remains, but it’s increasingly reserved for those with deep pockets, especially in popular vacation spots or areas with limited housing supply.
However, towns like Evanston, WY, and Brookings, SD, remind us that affordability is still possible, even as real estate trends shift. For prospective homebuyers, especially those considering a move to a small town, the key is to do thorough research, weigh the cost of living, and shop around for the best possible mortgage rate.
While small towns can offer peace, quiet, and a simpler way of life, the cost may not be much different from city living — at least when it comes to the price of a home.
