Few cities have both affordable housing and a strong job market.
Skyrocketing real estate costs in some big cities limits the options for people hunting for that "sweet spot" of home values and professional opportunity, according to real estate data company Zillow. San Francisco, for instance, offers excellent job growth, but its high housing prices are a definite drawback.
So where are the sweet spots? Several cities in Texas and Atlanta offer both plentiful jobs and cheap housing, a Zillow study found (see chart at bottom). Atlanta, for instance, offers a housing price-to-income ratio of 2.7, compared with 8.8 for San Francisco. Other good bets include Houston and the Dallas-Fort Worth area, Zillow said.
"Texas has been doing well for some time," Svenja Gudell, senior director of economic research at Zillow, told CBS MoneyWatch. "It's had solid job growth, and housing is very cheap."
Some smaller cities are also included in the sweet spot, including Grand Rapids, Michigan, and Augusta, Georgia.
Even though cities such as San Francisco and San Jose are extremely expensive on the housing front, there are other reasons for moving there, such as finding a dream job in technology, or wanting to live in a city with a lot of amenities. Still, the lack of affordable housing in San Francisco and other cities has prompted some soul-searching among local residents and city officials, with the San Francisco Business Journal reporting that only 14 percent of households there can afford the median-priced home, which stood at just short of $1 million late last year.
Then there are the cities in the "sour spot," suffering from both high housing costs and declining job growth. Those include Atlantic City, New Jersey, and Santa Fe, New Mexico. Atlantic City, a one-time gambling mecca, has seen several casinos close recently, including the Trump Plaza Hotel and Casino. Santa Fe, which draws retirees and people seeking vacation homes, has extremely expensive real estate, with a price-to-income ratio of 5.35.
"Those are places where you don't have as much employment growth and housing is expensive, so it's a double whammy," Gudell said.