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You can still make money in real estate. Just don't rely on market momentum. Find out how in Gems in the Rough. |
My Own Private Mayberry in Southern Indiana
The 3,000 people who live in Brownstown, Ind., are surrounded by corn and soybean fields. This is the friendly, sleepy town where my parents moved when I was a freshman in high school in the mid 1970s. They wanted an affordable and safe place to raise children, and to enjoy a slower pace of life than the one we had in metro Detroit.
Life in Brownstown is still affordable and safe, attracting newcomers such as Rosa and Gregory Merkle. When Gregory's employer transferred him to the area earlier this year, the Merkles sold their house north of Chicago and traded up to a custom-built, 3,000-square-foot home on a quiet cul-de-sac for $278,000, a little more than what their smaller, Chicago-area home sold for. Property taxes are about $2,500, less than half the $6,000 they paid before. Horses graze in neighboring fields, and their 10-year-old son, Brandon, heads into town for school or sports. "He's very happy," says Rosa.
Located in southern Indiana, halfway between Indianapolis and Louisville, Ky., Brownstown has a six-block downtown -- anchored by the Jackson County Courthouse, built circa 1873 -- with one traffic light. Truckers rumbling along Highway 50 might not spot Brock's restaurant, famous for its rhubarb and coconut-cream pies, or the Mexican joint with carryout margaritas. The town's personality shows up in hand-lettered store signs, trips to the Dairy Queen at night and hoopla over high school sports. Kim Lucas, whose family has owned Brownstown Hardware for decades, says her customers never worry about home prices or housing bubbles.
And prices are fairly stable: Turn-of-the-century fixer-uppers cost $45,000 to $60,000; neat 1950s-era brick ranches are available for $89,000 to $95,000; and new homes on the fringes of town range from $200,000 to $250,000. On average, houses stay on the market for about five months, but ones listed at $300,000 and up sometimes languish for a year.
If there's a housing boom, it's for homes in areas that are even more rural than Brownstown. "When I find houses in the country, they're gone quickly," says Sandy Hackman, a broker with Re/Max Professionals in nearby Seymour, Ind., who has a waiting list of buyers for houses on five or ten acres.
As much as I love Brownstown, I'm not ready to give up the urban amenities I have in the Detroit area. And Brownstown doesn't have much of a market for buying a house and renting it, either. Income in the area is below state and national averages. That translates into relatively low rents: $300 to $500 for a mobile home or apartment, or $500 to $700 for an older home, which could require too much maintenance for an absentee landlord.
For me, Brownstown is a lovely place to visit for family gatherings and the Jackson County Fair. Despite the appeal of this Mayberry in southern Indiana, it's not a place where you'll make a killing in real estate.
--Vickie Elmer
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