With graduation approaching, college students' minds are occupied with thoughts of the future.
Where should they live after college? Can they afford it? Will they find work?
Indiana realtor Patty Torr said students' foremost concern should be finding a job.
"I think that students might have a thought of where they want to live out of college, but, if they can't find a job there, it's a lost cause," Torr said. "Finding a job first is everything, and after that, make sure you can afford an apartment or another type of housing in the area."
According to Hannah Clark of Forbes.com, a Web site specializing in business, recent college graduates might want to reconsider moving to New York City, Los Angeles or Chicago to find jobs. When Forbes ranked the 100 best cities in the country to find a job, all three did very poorly. Los Angeles came in at No. 85, Chicago at No. 93 and New York at No. 96. Businesses and employees are moving south for the lower cost of living and warmer weather, Clark wrote on the site. Washington D.C., Phoenix and Las Vegas were ranked the top three cities to find a job.
LIVING IN MIDWEST
When it comes to affordable living, however, the Midwest is best.
The Midwest is the lowest-cost region in the country, with homebuyers getting more square feet for their money, said Walter Molony, spokesman for the National Association of Realtors. The West Coast, Southern Florida and the Northeast are the most expensive regions in the United States, he said.
Because the Midwest and parts of the South have room to grow, they are able to accommodate sudden spikes in housing demand, Molony said. The Midwest has higher levels of young homebuyers than anywhere else in the country, he said.
The West Coast and the Northeast are already so developed that they cannot build more homes to keep up with the markets, Molony said. Therefore, when demand for housing exceeds supply, the prices escalate, and the end result is that buyers have to pay much more for homes over time, he said.
Torr said the Midwest and, more specifically, the state of Indiana are some of the most affordable places to live in the country. The cost of living in Indianapolis, in accordance with its size, is also relatively low, she said.
According to CNNMoney.com, the median home price in downtown Indianapolis is $126,350, as opposed to $254,500 in Chicago and $515,000 in Los Angeles. Ball State University assistant professor Howard Campbell said the average rent for an apartment in Indianapolis is $700 to $1,000 a month, depending on the number of bedrooms. The rent on the West and East coasts ranges from $1,600 to $3,000, he said. The theory, however, is that people are getting paid more in New York and Los Angeles than they are in Indianapolis, he said.
RENTING VERSES BUYING
Although the prospect of investing in a house might be attractive, renting is much more appropriate for recent college grads, said Campbell, who teaches a class called Housing Decisions.
"Most people rent first until they figure out what they're going to do or where they're going to live," he said.
Renting gives residents flexibility, a maintenance-free lifestyle and many amenities that wouldn't otherwise be available to them, like a fitness center and tennis courts, Campbell said. Students should weigh the pros and cons of renting and buying before they graduate, he said. Renting is often less expensive than buying, Campbell said, but homeowners can benefit by building up equity and gaining some tax deductions.
Torr said other than location, people wanting to rent apartments usually look for the newness of the building, amenities such as a fitness room, swimming pool, tennis courts and a doorman for security.
Homebuyers tend to look at the quality of construction and school systems because even if the buyer does not have children, a good school system will help increase the home's resale value, she said.
Molony said people younger than 25 makeup only about 5 percent of the housing market, even though first-time homebuyers, in total, makeup 36 percent of the market. The typical homebuyer is more mature than a student right out of college, he said. First-time homebuyers' median age is 32, their median income is about $58,300 and the home they choose is valued at approximately $165,000, Molony said.
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