7 Worst States To Buy Property in the Next 5 Years

States Homebuyers May Want To Avoid Over the Next Five Years

When considering a home purchase, evaluating various factors such as cost of living, property taxes, crime rates, and local climate concerns is essential for making a smart investment. Doing your research now can help you plan for a future move or decide where to invest your money when the time is right.

While no one can predict the housing market with complete accuracy, understanding current trends can offer valuable insights into which areas may be less appealing for homebuyers in the coming years. Here’s what experts have to say about several states that could pose challenges for property investments over the next five years.

California

California's stunning landscapes and thriving culture make it an attractive place to live, but affordability remains a significant concern for potential homebuyers.

According to Yawar Charlie, an estates director with Aaron Kirman Group and a cast member on CNBC’s Listing Impossible, rising housing costs are just one piece of the puzzle. "In addition to the high cost of living, homeowners must contend with increasing risks from wildfires and droughts, which can make maintaining a property more expensive and stressful."

The state's tech industry boom, particularly in areas like the Bay Area, has driven home prices sky-high, causing many residents to relocate to more affordable regions.

Florida

Florida’s warm weather and reputation as a retirement haven attract many buyers, but climate risks could complicate homeownership in the state.

Rachel Stringer, a Realtor with Raleigh Realty, explained that Florida’s vulnerability to hurricanes and rising sea levels poses significant challenges for homeowners. "Storm damage and rising insurance premiums can make owning coastal properties much more expensive, and some homes may lose value if rising sea levels render them uninhabitable," she noted.

Illinois

Illinois offers a mix of big cities and rural farmlands, but financial troubles in the state could make it a less desirable place to buy a home.

Charlie pointed out that Illinois, particularly Chicago, faces some tough financial challenges. "The state has some of the highest property taxes in the country, coupled with rising crime rates and budget shortfalls. These issues can lead to cuts in essential services and increased taxes, making it harder for residents to justify staying."

Louisiana

Known for its rich culture and lively atmosphere, Louisiana has its appeal. However, the state’s vulnerability to natural disasters makes it a risky place for long-term property investment.

Tony Mariotti, founder of RubyHome, highlighted that Louisiana’s susceptibility to hurricanes and flooding can result in high insurance premiums and costly property repairs. Additionally, the state’s economy is not as diverse, leading to slower job growth and fewer opportunities. "Infrastructure issues also present challenges for homeowners, especially in areas prone to flooding," he added.

New Jersey

While New Jersey offers proximity to major metropolitan areas like New York City, the state’s financial burdens and other challenges may deter potential homebuyers.

"New Jersey has some of the highest property taxes in the nation, which can be a financial strain for homeowners," Charlie explained. "The state is also seeing large corporations leave, which impacts job availability. On top of that, residents often deal with long commutes and high health insurance premiums, making daily life more expensive and stressful."

New York

New York is often associated with high housing costs, but the challenges go beyond price alone.

Charlie pointed out that infrastructure issues, especially in New York City, can make daily life frustrating for residents. "The subway system, for instance, is known for frequent delays and breakdowns, which can impact commutes," he said. "Additionally, the rise of remote work since the pandemic has reduced the need for people to live in or near the city, leading many to seek more affordable options elsewhere."

West Virginia

West Virginia has a long history tied to the coal industry, but as that sector declines, so does the state’s economic stability.

Stringer noted that the downturn in coal production has left many small towns struggling. "With fewer job opportunities, people are leaving these areas in search of better prospects, which reduces demand for housing. This can make it difficult for homeowners to sell their properties at a fair price," she said.

Final Thoughts

While some states may present more risks for homebuyers in the near future, it’s essential to consider both short-term market trends and long-term factors like climate change, job growth, and infrastructure when deciding where to invest in real estate. Careful research and planning can help ensure your home purchase is a sound financial decision.