Every fall, parents wave goodbye as their college-bound kids pack up their belongings, make the drive down university lane and prepare for football games, mid-terms and freedom. While college living is often associated with dorms and campus housing, Coldwell Banker Real Estate LLC discovered that many parents are opting to purchase a home rather than spend money on rent or dorm fees. According to a recent survey among the Coldwell Banker network of real estate professionals in college towns, 64 percent see a significant number of “parent investors” buying homes for their kids to live in while attending the university.
To see how college towns stack up in home price affordability, Coldwell Banker Real Estate released its new College Home Listing Report (College HLR) today, which provides the average home listing price of four-bedroom, two-bathroom properties listed for sale between April and September 2010 on coldwellbanker.com in markets home to the 120 schools in the Football Bowl Subdivision. With almost two-thirds of the College HLR markets having subject homes priced less than $250,000 (78 in total), college towns prove to be a touchdown for homebuyers.
Muncie, Ind., home to Ball State University, is the No. 1 most affordable market in the College HLR, where the average home price for a four-bedroom, two-bathroom home costs $105,115. The most expensive market is Palo Alto, Calif., home to Stanford University, where the same size home averages at $1,385,652.
Evanston, Ill. is one of the most expensive college towns in the nation, where an average four-bedroom, two-bathroom home costs $559,855. Comparably, the same size home in Champaign, Ill., home to the University of Illinois, averages at $235,702.
“The College HLR helps bring attention to all the great attributes of college towns,” says Patrick O’Rourke, regional vice president of Coldwell Banker Residential Brokerage. “The North Shore is home to some of the best schools in the country and Northwestern University adds to the rich culture and character that makes the area one of the best places to live and raise a family.”
“Towns that are home to major universities have a special vibe you just don’t find anywhere else,” says Jim Gillespie, chief executive officer, Coldwell Banker Real Estate and alumni of the Illinois Fighting Illini. “It’s about more than just great sports and local flavor. College towns offer rich culture and most have steady economic bases oftentimes highlighted by outstanding medical and research facilities.”
While not all college towns are affordable, even the more expensive markets make great places to live.
The top 10 most expensive markets in the Coldwell Banker Real Estate College Home Listing Report are:
Coldwell Banker Real Estate also found that college towns have continued to be a hot spot for real estate investing, regardless of the downturn in the economy. Seventy-three (73) percent of Coldwell Banker real estate professionals surveyed said they see a significant number of investors buying homes near campus and renting them to people in the community, with only 21 percent seeing a decrease in this trend over the past five years.
“Our survey suggests two types of investors see value in college towns,” Gillespie says. “Long-term investors take advantage of the steady stream of renters, including students, professors and university officials. “‘Parent investors’ buy homes for their child to live in while attending college. Roommates provide rental income for the mortgage, and the hope is that students care for the home and it appreciates over time.”
With so many benefits to living in a college town, they aren’t just for investors. Alumni and retirees are finding reasons to re-live their glory days, as well. Fifty one (51) percent of the survey respondent noted they see a lot of alumni homebuyers, and 49 percent see a significant number of retirees moving to their college town.
“It’s not just students who want to live near campus, attend games and take interesting classes,” Gillespie says. “For a few years now, college towns have been popular markets for alumni and retirees. I’m a great example,” he said. “I purchased a home in Champaign, Ill. to be near my alma mater, the University of Illinois, and it’s one of the best decisions I’ve ever made, from both a lifestyle and a financial perspective.”
The survey of Coldwell Banker real estate professionals uncovered that a college sports team’s performance affects more than just a football ranking; nearly one quarter (24 percent) of respondents indicated that the success of a college’s sports teams can have an impact on the local real estate market.
For a fun look at fans’ perspectives, Coldwell Banker Real Estate spoke with dozens of people on a fall football Saturday for insider thoughts on what makes their college town special. To see these interviews, please visit Coldwell Banker On Location: http://www.youtube.com/watch?v=fmglCxq1sck.
Below is the first 25 schools on the College HLR ranking. Additional information on the College HLR and the larger HLR of U.S. and international markets can be found at http://hlr.coldwellbanker.com/.
The Coldwell Banker College Home Listing Report includes residential real estate listings appearing on ColdwellBanker.com between April and September 2010 for all real estate markets home to the 120 Football Bowl Subdivision schools, which each had at least six home listings during the timeframe. This market data includes property listings from Coldwell Banker affiliates as well as listings from other Realogy franchise brands that fit the same four-bedroom, two-bathroom criteria.
Methodology: Coldwell Banker Real Estate Professionals Survey
Coldwell Banker Real Estate conducted an online survey of 425 self-selected real estate professionals who represent markets home to major college or universities.