The most affordable city-like suburbs: Zillow-Yelp study

The suburbs moved into the spotlight this spring when the coronavirus pandemic untethered office workers from big city jobs — but bucolic living doesn’t have the same appeal for everyone.

A new study shows which affordable U.S. suburbs offer the highest-quality urban amenities including restaurants, nightlife and the arts. Two New England towns, Waterbury, Conn. and Lowell, Mass. topped the list, according to the analysis by Zillow and Yelp, based on affordability and availability of housing, diversity of business types and level of consumer activity.

“These towns have a lot of options for would-be homeowners who want big city vibes with nightlife and culture, but maybe here they can get a house that meets their wishlist for less money,” said Amanda Pendleton, Zillow home trends expert.

Read more: Buying a house: What you need to know about home ownership

Waterbury topped the list for its vibrant student life and bustling downtown area, which includes the historic Palace Theater and the Mattatuck Museum of art. Waterbury homes are unusually affordable, selling for a median $139,304 — which is 30% less expensive than homes in nearby New Haven.

Outside Boston, a small city called Lowell offers a downtown area, Lowell National Historical Park and beautiful sights along the Merrimack River — at about half the price ($323,576 median) of its notable neighbor. Edison, N.J., Frederick, Va., and Annapolis, Md. also ranked as top suburbs, solidifying the Northeast’s surprising hold on the list, despite the region’s reputation for high living costs.

“I think a lot of people will look at this list and say they never would have considered some of these places. But that’s the idea — these suburbs are under the radar,” said Pendleton. “These places are kind of like hidden gems within these metro areas in terms of affordability.”

In the Midwest, Joliet, home of the Chicagoland Speedway racetrack in Illinois, came in as the third most city-like low-cost suburb, charging a median $155,018 per home, a 40% discount compared to the median price in Chicago. Norman, Okla., also joined the list, bolstered by its student life, nightlife, coffee shops, and cheap home prices (median $180,833).

Zillow and Yelp also highlighted the home of the California Poppy Festival — Lancaster, Calif. — and outdoorsy Tempe, Ariz.

“Tempe, Arizona looks particularly good to me right now. The proximity to the hiking and parks and lakes — it’s a really neat spot and it's on the rise in terms of growth and development,” said Pendleton.

Many Southern towns also offered an attractive quality-of-life while maintaining affordable housing costs — including Sunrise, Fla., near the Everglades, Pasadena, a city near Houston, Tex., Hampton, Va., in the Chesapeake Bay and Marietta, Ga., outside Atlanta.

“All of these places are more affordable or on par with major metros nearby. They’re all sort of geographically central with access to amenities but also, often, access to outdoorsy activities,” said Pendleton.

Young homebuyers want and ‘urban life’ and ‘great backyard’

First-time homebuyers — mostly millennials (ages 24-39) — are driving the homebuying market as the largest generation in U.S. history enters prime homebuying age. These buyers value affordability — 36% are looking for homes under $200,000 and an additional 28% are looking for homes under $350,000, according to a Realtor.com survey this summer. But young buyers are also still looking for nightlife, coffee shops, retail and other urban amenities, according to Pendleton.

“Everybody really likes having these amenities nearby, but when you’re in that 20’s and 30’s stage of life, you can take advantage of it a lot more often. You can want to have those great parts of urban life, but you also might want a great backyard,” she said.

Demand for suburban homes has driven home prices up 3.2% since March compared to only 2.3% in urban areas, and suburban homes are selling 16.2% faster than last year, compared to only a 10.4% acceleration in urban areas, according to a study by Realtor.com.

“The pandemic shaped where people want to live. People are spending so much time in their homes that they’re beginning to ask themselves if their home is meeting their needs. They want more elbow room, more outdoor space — and they can do that by looking further afield, now that they don’t have to commute five days a week,” said Pendleton.

Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter

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