Ok, so I'm soliciting opinions on buying real estate in locations other than Los Angeles.

As DeoDuce and I have been exploring St. Charles, MO, we've noticed something strange, there are two kinds of houses available:

1. New construction (5 years or newer), expensive, large houses, small lots, tightly packed subdivisions, far from the city (where I'll work).

2. Older homes (around 20 years), slightly smaller (and less modern floor plans), larger lots (acre-ish), less subdivisiony, much closer to the city).

The Type 1 houses appear to be what everyone here is buying, and they're going for ~$100k more than the Type 2 homes. However, my instinct tells me that in the long run it will be more valuable to own larger plots of land closer to the city. People hate commuting -- as I do -- and like open spaces. The Type 1 houses won't be brand new in a few years; then they'll just be older houses, far from the city, on tiny lots.

So, right now we're thinking that we want to buy a Type 2 house that's close to my work and has a lot of land. Even if it needs renovation (not that 20 years old is that bad for a house) we'll have $100k to play with before we get close to the price of the Type 1 houses. Also, I've read that you pay a premium to buy a new house and that they can depreciate over the first few years, just like a new car.

So, what are your thoughts? Am I foolish to think that land and location will pay off in the long run in a place like Missouri? I find it hard to believe that Type 1 houses will continue to be more valuable than Type 2 houses once they aren't new anymore... and for $100k difference in price we could fix up a Type 2 house pretty nice.

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