College-Town Bargain Homes Beckon to Families, Retirees

(MoneyWatch)  Looking for a great place to raise a family, retire after you've raised one, or invest your IRA funds in a strong rental-home market? Maybe it's time for you to go back to college.

A new Coldwell Banker survey confirms what real estate professionals have long known - college towns offer a great mix of affordable homes and quality of life. Its annual College Home Price Comparison Index shows the housing-market collapse has created bargains in college towns, too, with a 2,220-square foot, four-bedroom home costing less than $250,000 in nearly two-thirds of the 72 markets surveyed.

So what's the attraction of university cities and college towns? They often have lower crime rates, better-than-average public schools, a thriving cultural scene, stable home prices due to student demand for off-campus housing, and quality health care at hospitals linked to medical schools. And if you're inclined to enroll yourself or send you children to the local school, consider these 14 colleges with bargain tuition.

"College markets have long-been one of the real estate industry best-kept secrets," Coldwell Banker CEO Jim Gillespie said. "These vibrant cities are not only for students; many empty nesters and families are attracted to the health-care systems, culture and overall quality of life that college towns offer."

The five college towns with the least expensive, typical four-bedroom home in the survey: Akron, Ohio (Univ. of Akron), $121,885; Muncie, Ind. (Ball State), $144,996; Ann Arbor, Mich. (Univ. of Michigan), $148,000; Ypsilanti, Mich. (Eastern Michigan Univ.), $151,500; and Fort Worth, Texas (Texas Christian), $153,450.

As the rankings of 120 schools showed, not all of their housing markets are a bargain. For instance, the most expensive was Palo Alto, Calif., home to Stanford University and surrounding Silicon Valley, where the four-bedroom home costs $1.49 million.

If you have children approaching college age whom you hope to send to one of your state's top public universities, consider buying a rental house or condo that could serve as home to one or more of your college-bound kids -- and then be sold at the other end of a recovery in housing prices.

The same goes for empty nesters a few years from retirement who want to be exposed to the youthful vitality of a college town, rather than age-segregated world of an "active-adult" community. You could purchase a rental property to downsize into in the future -- after the remodeling and repairs you'll need to do if you rent to college students.