Americans Name Denver, San Diego, and Seattle as Best Places to Live

According to a recently published study by the Pew Research Center,  most Americans like where they live and report that they feel mostly happy there, and yet most also report they would live somewhere else if they could. Topping the list of most-preferred metropolitan areas were Denver CO, San Diego CA, and Seattle WA, in that order. The least desirable cities in which to live (according to people polled) were Detroit, Cleveland, and Cincinnati.

Most Americans said they would rather live in the country or the suburbs, even though recent trends have shown that suburban home sales are declining while urban areas are increasing in value and are more in demand. While Americans might not actually be able to afford the suburbs or the country, the Pew poll confirms that the dream of a gentleman farm or a suburban tract with a three car garage is still very much alive.

Most of the preferred areas named were located in on the west coast of the United States and in the the desert southwest, including Colorado, New Mexico, and Arizona. Young adults expressed a preference for living in New York or Los Angeles in the middle of all the congestion and all the action. Older adults consistently named Phoenix as their favorite city. Phoenix was also repeatedly cited as the favorite of Republicans and political conservatives, while liberals and Democrats gravitated toward San Francisco. New York City consistently landed right in the middle of most of the ranked preference lists.

How can a foreign investor decipher this kind of data?

This 1400 sq ft classic home in Groton, CT is listed at $264,900 but will likely retain value or appreciate due to its proximity to NYC and other major metropolitan areas.

One thing the study points out is that Americans don't always live where they want to live. American workers have to follow the job market, which is mostly urban and mostly coastal. That means coastal urban centers (where many residents wish they did not have to live) have more stable real estate values than the small towns and suburbs that lie outside these urban centers (even though most Americans say they would rather live in them).

By contrast, the midwestern portion of the U.S., home to American industry and agriculture, has lost millions of jobs over the past decade. So although many real estate bargains can be had in Cincinnati, Detroit, and Cleveland--some of those bargains almost unbelievable--citizens of those cities are fleeing them in droves, often whether their homes are sold or not.

Indiana and Illinois, home to many multinational insurance firms, are a bit of an exception to this rule. Foreign investors can often find good values in those two midwestern states with the help of a good agent who understands which cities are experiencing insurance industry growth and who also knows where the big employment centers and bedroom communities for them are located.

The study also highlights the tensions Americans currently feel between what kind of lifestyle they want, and what kind of  lifestyle they can actually manage. When considering rural, small town, or suburban property investment, foreign investors would be well advised to consider how accessible those areas are to urban centers, and who lives there.

Some small towns such as those in Vermont and Connecticut will always appreciate or at least maintain their value because of their proximity to New York, Philadelphia, and Washington D.C. Despite being a one to two hour drive away from these cities by car, living in those towns is always desirable.

Connecticut and Vermont have very stable and slowly appreciating real estate prices, but homes there do not come cheap, and the people who live there tend to be wealthy. A bargain in an area like that is a real bargain. A 'bargain' in Detroit, could become an albatross. Growth in most parts of the country is incredibly neighborhood specific, which makes a good real estate agent an absolute necessity.

Right now trends in United States real estate are very volatile, with much depending on how the current global economic crisis is handled and how long recovery actually takes. Knowing what Americans want and think can help the foreign investor know which areas to watch.

For more general tips on investing in real estate in America, read our article on United States Real Estate Prospects for 2009.