Just as my colleague and Buildings & Grounds co-conspirator Lawrence Biemiller makes his way through college towns across the country, various news media are buzzing about the affordability of such places.
“According to a new national study by Coldwell Banker Real Estate, more parents are buying houses for their kids to live in while they attend school—or moving the whole family near campus so their kids can live at home,” says an article in Forbes. “According to Coldwell Banker’s study, 64% of 425 real estate professionals surveyed across the United States report a ‘significant number’ of parent investors buying near campus. And while real estate investors have long purchased homes near campuses and rented them out, parents are increasingly making their investments work in a similar fashion, says [the company's chief executive Jim] Gillespie, collecting rent from their kid’s roommates and selling the houses upon graduation.”
Reuters opened its article with college-town parents:
San Fransisco Bay-area couple Kate and Dale never expected to be landlords. But that’s exactly what happened when they decided to buy a three-bedroom townhouse for their daughter in her sophomore year at University of Washington in Seattle.
“Some of the campus housing we saw was horrible, and it was expensive, too,” says Kate. “We decided we could create a safe, good quality home for her and we thought it would be a good investment on top of it.”
Hmmm. I don’t know what a “‘significant number’ of parent investors” means. According to the short note on methodology, the study’s findings were derived from “an online survey of 425 self-selected real estate professionals who represent markets home to major college or universities.” I called Coldwell Banker to ask for more details on the study that informs the press release. David Siroty, vice president for communications, acknowledged that the bit about parent investors in college towns was anecdotal. But he emphasized that real-estate brokers had indeed noticed that some parents were more willing to sink money into a college-town home instead of room and board, particularly around big state institutions.
And he noted that that Mr. Gillespie himself had purchased a townhouse in Champaign, Ill., where he frequently goes to attend University of Illinois sports events. Then Mr. Siroty put his boss on the line.
“If you can believe this, it’s three bedrooms, three baths, two-car attached garage, deck, and a wood-burning fireplace for $120,000,” Mr. Gillespie said. He bought the house from a Chicago family whose son had lived there while going to the university.
Mr. Gillespie also acknowledged that the trend wasn’t widespread. “That’s one of the reasons we do this survey every year—to pop the idea into a parent’s head.”
With this report, Coldwell Banker also ranks the most affordable and least affordable college towns. Mr. Siroty said the figures are the meat of Coldwell Banker’s study. They were derived from listings from April through September for four-bedroom, two-bathroom homes, with the top and bottom 10 percent cut out to avoid skewing the numbers. The most affordable college towns, the primary college in them, and the average home prices follow:
1. Ball State University, Muncie, Ind.: $105,115
2. University at Buffalo, Buffalo, N.Y.: $117,223
3. University of Memphis, Memphis, Tenn.: $135,090
4. University of South Carolina, Columbia, S.C.: $137,707
5. University of Akron, Akron, Ohio: $139,711
6. Eastern Michigan University, Ypsilanti, Mich.: $141,629
7. Ohio University, Athens, Ohio: $141,964
8. Kent State University, Kent, Ohio: $153,662
9. University of Toledo, Toledo, Ohio: $155,286
10. Louisiana Tech University, Ruston, La.: $157,110
The identities of the least affordable college towns are not surprising. Palo Alto, Calif., home of Stanford University, tops the list, followed by Honolulu, Los Angeles, and Boulder, Colo.