Dorm Life: Rent or Buy?

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Coldwell Banker has released their annual index of college town affordability. While your average freshmen may be more worried about beer money than paying the mortgage, some families may consider buying a home for their student.

Particularly with the first-time buyer credit being extended into 2010, it may be something for undergrads and grad students to consider. The average four-bedroom home in Louisville, Ky., (shown) is just $198,721.

One of the great things about college towns is that they tend to be good, stable job markets, and you have the built in rental population of students who are going to be coming and going.

But not all college markets are cheap by any stretch.

For example, if you look at the breakdown by conference (left), the West Coast-based Pac-10 is by far the most expensive, with an average home price of almost $750,000. Four of the most expensive colleges on the entire list are in the Pac-10, including Stanford, Southern Cal, UCLA and Berkeley.

The Ivy League wasn't included, because the index is focused on big-time football, but Boston College is the third most expensive schools, so you wouldn't think Harvard, Columbia and UPenn would bring the curve down much on affordability.

Boston College is actually in the ACC now, so you would think that actually messes up the average for the Atlantic Coast Conference some what, as schools like Clemson generally have fairly cheap housing.

Of note, the index has the U.S. Naval Academy as one of the most expensive housing markets at 111 out of 117, but midshipmen all live on campus in Bancroft Hall. Plus, they are one of the "Independents," so they also bring that average way up at $687K.

At the other end of the spectrum, colleges in the Midwest or Southeast usually have much cheaper housing, but renting is going to be cheaper also.

God forbid if the kid ends up transferring!




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