Theater productions, sporting events, art exhibits, well-known speakers—life in a college town has all sorts of perks. "There is always something going on because of the university, and the students keep you young," says Shannon Overby, the executive director of the Bryan-College Station Convention and Visitors Bureau, which covers the area where Texas A&M University is located. But if you've always dreamed of moving to a college community, buying low is a key ingredient in a successful real estate investment, as any freshman economics major can tell you. In order to identify the college towns with the most undervalued real estate markets, we turned to IHS Global Insight's first-quarter 2009 House Prices in America report. The report uses population density, household income, and other data to compare a housing market's current value with where it should be on a purely statistical basis. Using this data, U.S. News put together the following look at 15 great, underpriced college towns:
(Quick note: We used a liberal definition of the term "college town" in order to include certain cities—such as Houston—that, although they have strong schools, aren't necessarily defined by their association with a given university.)
1. Houston: Among the handful of colleges located in Houston is Rice University, which ranks 17th on U.S. News's Best National Universities list for 2010. With just 3,102 undergraduate students, Rice prides itself on its intimate educational experience; it has a 5-to-1 student to faculty ratio and a median class size of 14. The presence of this top-notch university benefits the greater community in a number of ways. For example, Rice's continuing education initiatives provide a host of noncredit courses—covering topics such as foreign languages and professional development—and even a degree-granting Master of Liberal Studies Program. And in the summer, Rice hosts a two-week summer program for high school girls designed to boost confidence and enthusiasm about computer science studies. The median home price in Houston was $120,000 in the first quarter, which IHS Global Insight considers 37 percent undervalued. James Gaines, a research economist at the Real Estate Center at Texas A&M University, expects future job and population growth to drive home price appreciation going forward. "The medium- and long-term prospects for Houston are extremely good," Gaines says. The city has "good demographic growth, job growth, and a reasonably balanced housing market," he says.
2. Atlanta: The Georgia Institute of Technology—or Georgia Tech—is one of several universities in the greater Atlanta area. Located on a 400-acre campus smack in the middle of the city, Georgia Tech is considered among the best research universities in the country and clocked in at No. 35 in U.S. News's most-recent Best National Universities rankings. Atlanta residents can take advantage of the university's presence through a number of programs, including the Georgia Tech Enterprise Innovation Institute, which uses science and technology to help entrepreneurs build successful start-ups and established companies compete more effectively. The median home price in Atlanta was $148,000 in the first quarter. According to IHS Global Insight, that's 24 percent undervalued.
3. College Station, Texas: Situated in College Station, which has a population of about 86,000, Texas A&M University has the nation's largest student body not located in a major metropolitan area. The university, with more than 46,000 students, was ranked 61st on U.S. News's Best National Universities list for 2010. The community offers a safe, family-friendly quality of life, which is only enhanced by the university, says Overby. "Aggie sports is a big deal," Overby says. "Whether or not you went to school here, if you live here you can't help but be an Aggie." In addition, local residents can take advantage of the programs and events at the George Bush Presidential Library and Museum, which is located in College Station. "They bring in world-renowned speakers and dignitaries throughout the year for different things," Overby says. The median home price in the Bryan-College Station area was $107,000 in the first quarter, which IHS Global Insight considers 21 percent undervalued.
4. Columbus, Ohio: In addition to being the capital of the state and the headquarters of big companies like Nationwide Mutual Insurance, Columbus is—of course—the home of Ohio State University, which ranks 53rd on U.S. News's Best National Universities list for 2010. "The misconception about Columbus from a national standpoint is that we are a college town, when in fact we are the largest city in Ohio [and] the 15th-largest city in America," says Paul Astleford, the president and CEO of Experience Columbus. "And the combination of having a huge city—a capital city—and having the largest university in the country all in one has created a dynamic that has been far beyond what you would experience in a normal college town." On top of its high-profile sports offerings—Ohio Stadium can accommodate more than 100,000 fans for Buckeyes football games—the university benefits the community through continuing education and other outreach programs. IHS Global Insight says the median home in Columbus, at $134,000 in the first quarter, is 21 percent undervalued.
5. South Bend, Ind.: With just over 100,000 residents, South Bend is best known as the home of the University of Notre Dame. This independent, Roman Catholic university has nearly 12,000 students and ranked 20th on U.S. News's most-recent Best National Universities list. Notre Dame is renowned for its serene campus—which includes the breathtaking Golden Dome—and of course, the proud tradition of Fighting Irish football. The median home price in South Bend was $102,000 in the first quarter, which IHS Global Insight says is 19 percent undervalued.
6. Ann Arbor, Mich.: This lovely city has been home to the University of Michigan Wolverines since 1837. The school has a total enrollment of more that 55,000 students and ranked 27th on U.S. News's 2010 Best National Universities list. "It's a very educated demographic that lives here," says Marianne Gosz Klinker of the Ann Arbor Area Convention and Visitors Bureau. In addition to football Saturdays, when more than 100,000 screaming fans pack into Michigan Stadium, Ann Arbor's residents can benefit from the university's museums, theater productions, and botanical garden. Klinker also says that "we have great healthcare in the city because of the university healthcare system." The median home price in Ann Arbor was $159,000 in the first quarter, which IHS Global Insight considers 19 percent undervalued.
7. Athens, Ga.: The University of Georgia is located in the spunky Southern town where popular music groups R.E.M. and the B-52s got their starts. With more than 34,000 students, the school was the nation's first-ever state-chartered university. It ranked 58th on U.S. News's most-recent Best National Universities list. In addition to Georgia Bulldogs sporting events, which are always popular, residents can take advantage of all sorts of cultural offerings though the university. "We have a number of local theater companies, we have the state's art museum—the Georgia Museum of Art—as well as two local art galleries that people can go to, and [the State Botanical Garden of Georgia] is also here," says Hannah Smith of the Athens Convention and Visitors Bureau. "College towns are wonderful because they have got such a high level of culture without having to be in such a large metropolitan area." The median home price in Athens was $126,000 in the first quarter. That is 17 percent undervalued, IHS Global Insight says.
8. Tallahassee, Fla.: Tallahassee is the home of Florida State University, which has more than 40,000 students and ranked 102nd on U.S. News's most-recent Best National Universities list. The median home price in Tallahassee was $130,000 in the first quarter, which IHS Global Insight considers 17 percent undervalued.
9. Gainesville , Fla.: About 129 miles down the road from Florida State is Gainesville, where the University of Florida is located. The University of Florida, with about 50,000 students, is the oldest and largest university in the state and ranked 47th on U.S. News's Best National Universities list for 2010. Residents can take advantage of the university's top-notch athletic program. "All of the sports venues here are not only affordable and fun but they're quality is just not matched," says Roland Loog, the director of the Gainesville/Alachua County Visitors and Convention Bureau. Loog says the community also can benefit from the big-ticket speakers that the university attracts. "Not too long ago when Bill Clinton spoke here, we simply walked to the O'Connell Center, walked in, and listened for free," he said. "Followed by that was Michael Moore." The median home price in Gainesville was $135,000 in the first quarter, which IHS Global Insight says is 17 percent undervalued.
10. Lincoln, Neb.: Tucked into Nebraska's sweeping prairie is the city of Lincoln. With a population of nearly 250,000, Lincoln is the state capital and home of the University of Nebraska Cornhuskers. This public, land-grant university has more than 18,000 undergraduates and ranks 96th on U.S. News's most-recent Best National Universities list. In addition to the university's strong athletics program, Lincoln residents can take advantage of the University of Nebraska State Museum, the UNL Botanical Garden and Arboretum, and the Great Plains Art Museum. At $119,000 in the first quarter, the median home price in Lincoln is 16 percent undervalued, IHS Global Insight says.
11. Minneapolis-St. Paul: The University of Minnesota-Twin Cities is located in lovely Minneapolis. With more than 32,000 undergraduates enrolled, the University of Minnesota ranked 61st on U.S. News's Best National Universities list for 2010. The median home price in the Minneapolis-St. Paul area was $177,000 in the first quarter, which IHS Global Insight considers 16 percent undervalued.
12. Boston: Beantown has long been considered a great destination for college students, as a slew of first-rate universities call the Boston area home. In the Best National Universities list for 2010, U.S. News ranked Harvard University No. 1, the Massachusetts Institute of Technology No. 4, Boston College No. 34, and Boston University No. 56. The median home price in the Boston-Quincy area was $322,000 in the first quarter, 16 percent undervalued, according the IHS Global Insight's calculations.
13. Fayetteville, Ark: The University of Arkansas is located in this city of about 71,000 in the Ozark Mountains. With more than 15,000 undergraduates, the University of Arkansas ranked 128th on U.S. News's most-recent Best National Universities list. Fayetteville's connection to the university presents its residents with "a lot of opportunities that a city of the same size might not have without that layer," says Marilyn Heifner, executive director of the Fayetteville Advertising and Promotion Commission. "We get a lot of great sports and then a lot of arts and culture." Moreover, Fayetteville is a safe, family-friendly community, Heifner says. "On Saturday mornings one of our biggest activities is the local farmers market, which has been going on [for] 35 years," she continues. "It is a great place to bring your dog, meet your friends, the whole nine yards, which gives you a sense of the great community." IHS Global Insight considers the median home price in Fayetteville—$122,000 in the first quarter—to be 15 percent undervalued.
14. San Luis Obispo, Calif.: Beautiful San Luis Obispo is home to California Polytechnic State University, which has more than 18,000 undergraduates. U . S . New s ranked the school as having the nation's sixth best undergraduate engineering program (among those that don't offer doctorate degrees). The median home price in San Luis Obispo was $330,000 in the first quarter, which IHS Global Insight considers 14 percent undervalued.
15. Columbia, Mo: The University of Missouri has more than 23,000 undergraduates and ranked 102nd on U.S. News's Best National Universities list for 2010. The connection to the university provides any number of benefits to the local community, says Don Laird, the president of the Columbia Chamber of Commerce. "[You have] a lot of great sports, you have a lot of great art, and all of these things that you probably wouldn't get in a town our size if you didn't have" the university. Columbia's median home price was $125,000 in the first quarter. According to IHS Global Insight, that is 14 percent undervalued.
- Houston: 37 percent undervalued
- Atlanta: 24 percent undervalued
- Bryan-College Station, Texas: 21 percent undervalued
- Columbus, Ohio: 21 percent undervalued
- South Bend, Ind.: 19 percent undervalued
- Ann Arbor, Mich.:19 percent undervalued.
- Athens, Ga.: 17 percent undervalued
- Tallahassee, Fla. : 17 percent undervalued
- Gainesville, Fla.: 17 percent undervalued
- Lincoln, Neb.: 16 percent undervalued
- Minneapolis-St. Paul : 16 percent undervalued
- Boston: 16 percent undervalued
- Fayetteville, Ark: 15 percent undervalued
- San Luis Obispo, Calif.: 14 percent undervalued
- Columbia, Mo.: 14 percent undervalued