After over a decade of being the most expensive places to live, residences in downtown areas across the country are more affordable than those in the rest of the places.
In the early 2010s, cities nationwide began revitalizing declining urban centers by developing residential spaces in areas dominated by commercial real estate. Downtowns were promoted as hubs for 24/7 lifestyles, offering shopping, restaurants, cafes, offices, and cultural venues within walking or biking distance.
By 2014, revitalization significantly increased downtown home prices — 11 of the 40 most populated U.S. cities saw home prices more than double those in the rest of the places. In Philadelphia, for instance, the median sale price downtown was nearly five times higher than the rest of the city.
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But not all downtowns experienced the boom. In 2014, nine downtowns had lower home prices than the rest of their respective cities, many needing more budget to revive their urban cores.
Then COVID-19 hit, changing the landscape dramatically.
| Location | Downtown median sale price 2023 | City median sale price 2023 | Downtown median sale price 2014 | City median sale price 2014 | 10-year change downtown | 10-year change city |
| Albuquerque | $308,000 | $319,000 | $180,000 | $167,000 | 71% | 91% |
| Chicago | $269,000 | $284,000 | $326,000 | $203,000 | -17% | 40% |
| Dallas | $295,000 | $307,000 | $180,000 | $127,000 | 64% | 142% |
| Denver | $482,000 | $551,000 | $356,000 | $287,000 | 35% | 92% |
| Kansas City | $188,000 | $229,000 | $135,000 | $103,000 | 39% | 122% |
| Los Angeles | $627,000 | $980,000 | $570,000 | $532,000 | 10% | 84% |
| Portland | $345,000 | $485,000 | $285,000 | $270,000 | 21% | 80% |
| San Diego | $730,000 | $850,000 | $474,000 | $454,000 | 54% | 88% |
| Seattle | $745,000 | $845,000 | $570,000 | $452,000 | 31% | 87% |
Source: PropertyShark
Homes in 17 of the country’s most populated cities are more affordable in downtown areas than they are in the rest of the metro area. But it's not because of falling downtown prices. Instead, home price growth in other parts of the cities has outpaced that of the urban core despite significant gains in downtown prices.
Kansas City, Missouri, saw the biggest discrepancy in price growth in the last ten years, with downtown prices rising by 39% while the rest of the city skyrocketed by 122%. A decade ago, downtown Los Angeles was $38,000 more expensive than the rest of the town, but now it's $353,000 cheaper.
Cities like Minneapolis, Bakersfield, California, and San Jose, California, had cheaper downtown areas 2014. While prices have increased in the ten years since then, the faster appreciation rates in the cities at large have widened the gaps.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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