Homebuyers who have been squeezed out of the country’s priciest housing markets are increasingly looking to an unexpected option in the Midwest.
Topeka, Kansas, is emerging as one of the most affordable places in the nation to buy a home.
In May, the median home listing price in Topeka was $267,000, according to Realtor.com — more than $160,000 lower than the national median. Many properties are listed for significantly less, underscoring the city’s appeal to budget-conscious buyers.
That affordability is helping transform the Kansas capital, home to about 125,000 people, into a draw for buyers seeking relief from the soaring costs seen in larger metropolitan areas.
Realtor.com’s analysis found that a household earning the local median income would spend just 25.3 percent of its income on housing. That is well below the widely used affordability benchmark of 30 percent.
Among the lower-priced options on the market is a three-bedroom home with a porch swing listed for $160,000.
For those not afraid of some elbow grease, there is an 1,132 square foot three-bedroom fixer upper on offer for just $35,000.
Buyers from Kansas City, Chicago, Minneapolis, Denver and Los Angeles are increasingly browsing listings in the market, according to cross-market demand data.
Topeka, Kansas, has emerged as one of the nation’s most affordable housing markets, with the typical home listed for $267,000 in May, according to Realtor.com
This 1,365 square foot three bed, one-and-a-half bath house is priced at $160,000
Adam Outlaw, 25, moved from Boston to take advantage of the dramatically cheaper cost of living
The contrast is especially striking for Californians. While the median listing price in the Los Angeles metro topped $1.1 million in May, homes in Topeka typically sold for about one-quarter of that amount.
The affordability becomes even more apparent when looking at what buyers can actually get for their money.
One 1,076-square-foot, two-bedroom, one-bath home in Topeka is currently listed for $140,000, while a 1,441-square-foot, three-bedroom, two-bath property is on the market for $165,000.
Topeka’s affordability is driven by a combination of relatively low home prices, higher purchasing power and a cost of living estimated to be about 15 percent below the national average.
The city also benefits from a diverse employment base.
As the state capital, government remains the area’s largest employer, with nearly 10,000 state workers on the payroll. Major employers also include the University of Kansas Health System St. Francis Campus, Stormont Vail Health, Goodyear Tire, Mars Wrigley and Frito-Lay.
The city’s affordability is helped by a labor market anchored by government, healthcare and manufacturing jobs, helping keep incomes relatively strong while housing costs remain comparatively low.
Local leaders have also sought to attract newcomers through initiatives such as Choose Topeka, a relocation incentive program that offers qualifying workers financial assistance of up to $15,000 to move to the city.
Among those to make the leap was project manager Adam Outlaw, a young professional who moved from Boston to take advantage of the dramatically cheaper cost of living.
‘Being able to move around freely and park in a driveway is something I do not take for granted anymore,’ he told Business Insider.
One 1,076-square-foot, two-bedroom, one-bath home in Topeka is currently listed for $140,000
Buyers from cities including Los Angeles, Denver, Chicago and Minneapolis are increasingly looking to Topeka as they search for lower housing costs and a cheaper cost of living
The Kansas capital benefits from a diverse employment base anchored by government, healthcare and manufacturing jobs, helping keep housing relatively attainable for local residents
Topeka sits about an hour from Kansas City, giving residents access to major-league sports, entertainment and a larger job market while maintaining a significantly lower cost of living.
But buyers lured by cheap homes may encounter a few hidden costs. Property taxes in Shawnee County are higher than the national average.
Financial website SmartAsset estimates the county’s effective property tax rate at about 1.42 percent, while property tax platform Ownwell places Topeka’s effective rate closer to 1.5 percent.
Weather can also make homeownership more expensive.
Located in the heart of Tornado Alley, Kansas regularly experiences tornadoes, hailstorms and severe weather.
Kansas homeowners pay some of the highest insurance premiums in the country because of the state’s elevated storm risk, according to Bankrate.
Meanwhile, NerdWallet estimates annual homeowners insurance costs can exceed $5,000 depending on the property and coverage levels.
Another challenge is inventory. According to Realtor.com senior economist Joel Berner, there were roughly 35 percent fewer homes available for sale in Topeka last month than there were before the pandemic, creating more competition among buyers.
One 1,441-square-foot, three-bedroom, two-bath home is on the market for $165,000
While home prices remain well below the national median, buyers in Topeka still face challenges including limited inventory, higher property taxes and costly homeowners insurance tied to severe weather risks
The limited supply has helped push Topeka to number 43 on Realtor.com’s Hottest Markets ranking, which measures buyer demand and market pace.
Despite the growing interest, Topeka has largely avoided the speculative buying frenzies that fueled dramatic price increases in many Sun Belt boomtowns during and after the pandemic.
