Real estate data from Homes.com revealed Turkey and Greece as two of the most economical markets for owning a 2nd home. Analysts scoured variables from 36 developed (OECD) countries calculating the best places to get a choice home for the least money. I found the analyst’s data to be a bit deceiving. Here’s another look at what we perceive as value and affordability.
The data showed Turkey as the most affordable country for 2nd home buyers, with an average cost of $69 per square foot. Mexico placed second for affordability, with $90.10 per square foot. Russia and Latvia placed 3rd and 4th, and Greece came in 5th with an average cost per square foot of $149 dollars. Naturally, Switzerland was the costliest place for a 2nd home, with an average cost of $967 dollars per square foot.
In order to demonstrate the affordability of world properties, Homes.com factored in the cost per square foot of homes with median annual household income in each, and then applying a 3x salary multiplier to determine affordability. However, this formula is a bit overbalanced since living in places like Turkey or Greece is far cheaper than in the United States or Central European countries. Homes.com seems to have used local average incomes to determine affordability, rather than factoring in the average American’s income.
To make my point, let’s say the average income is $60,000 annually. In Greece, for instance, the average adjusted income is only about $17,000 per annum. Depending on what your idea of the perfect 2nd home is, and how long you intend to stay in the home, Greece represents a substantial value compared to anywhere in the U.S. The Homes.com report leans toward the “value” of home ownership in America, but affordability wise somebody making on a U.S. pension from a good company is better off staying in Greece, for several reasons. Factoring in relative security, Greece is a far better choice than either Latvia, Russia, or Turkey, and this is especially true here on Crete where I live. But let’s just look at income, cost of living, and the media cost of a sample property.
Let’s say your idea of a retirement or vacation home is a village house a few kilometers from the sea. The average cost of such a home across Greece is in between $57,000 and $230,000 dollars U.S. To prove my point, however, I can do a property search from here in Heraklion and find your perfect 2nd home for half of what the same home would cost in America. Let’s begin.
I assumed anyone moving to the land of the Minoans would want something a tad rustic but with all the conveniences. So, within 2 minutes on Rightmove I found this wonderful property in an area I actually am familiar with. I let the reader pan over the landscaping and the views of amazing Crete, and focus on the village Gavalohori.
Located at Cape Drapan in the Vamos municipality of the Apokoronas region, this quint village is named after the Gavalas family who lived here during the reign of the Venetians. It sits in a kind of lofty paradise within a couple of minutes of at least two of Europe’s best beaches, and just outside famous Chania. The village has about 350 full-time residents, and the history of the place is amazing. The list of the house shown is $137,500 (€120,000 euro) for about 645 square feet situated on about a tenth of an acre.
Next, I tried to find a comparable area in the United States, and I chose Yorktown, VA since I had lived there in the past. In all honesty, I could not find a comparable property at all using Homes.com. The closest thing was a little cracker box, mostly garage, in a cul-de-sac for $204,000. So, I decided to look for other areas where there might be a comparable listing. Next, I tried James Island outside of my hometown of Charleston, SC. Opps! One house on Trulia with 2 bedrooms there is $200,000 dollars. I did find a foreclosure with a muddy swamp for a front yard for $124,000 though. Sorry, I am being real here, the image is above. Moving on, I finally found something comparable. Well, at least interesting in the same way. In Fairhope, Alabama waterfront living comes at a premium, even if water moccasins roam free there. For $169,000 somebody interested in modular living with a boat slip on a canal can buy a two bedroom near Weeks Bay.
Of course, my methods here are not as scientific as the Homes.com analysis. I guess my point is that there are exceptions to all these analyses. Anyone looking for economy in a 1st or 2nd home is well advised to burn a few hours of research. I spent 20 minutes, 15 of which was in trying to find a match to an overseas property, which should tell you something. In my opinion, American homebuyers are now “conditioned” to appreciate a different visual and a separate value. Most of the homes I looked at, now that I’ve lived in Europe for some time, seem like stick houses for the three little pigs. Our housing situation in America is about curb-appeal and square footage. We want 4 bathrooms in a 2 bedroom house and a garage big enough to park two Hum Vs. If you’re looking for affordability to match your 2nd home fantasy, energy efficiency, and the fact coffee is delivered everywhere on Crete might matter.
- Average rent in an exclusive area: U.S. – $3000 Greece $750 mo.
- Average utilities for one person: U.S. $150 – Greece $108
- Public transport (monthly pass): U.S. $70 – Greece $35
- A kilogram of fresh tomatoes: U.S. $3.98 – Greece $1.64
Overall, the cost of living in the United States is 23.01% higher than in Greece. Rent, as a prime indicator, is 259.77% higher in American than in Greece (average data for all cities). In fairness, I should point out that some commodities are higher in Greece. For instance, a liter of fresh milk is about $1.64 in Greece compared to $84 cents in America. But, here on Crete, a slight alteration of lifestyle can turn a social security pension into a windfall. I know, because most of my income is from my SS.
Analysis is always tilted by the perspective of the scientists performing it. If you are looking for a 2nd home in America, you can certainly rationalize your way into that dream. But if you truly want that affordable vision of vacation paradise living, I sincerely recommend looking at markets like Costa Rica, Belize, Greece, and other relatively safe destinations where economics make sense.