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I think there is a thread floating around that discusses the most affordable cities. But yes, it is possible to get a nice home for $250,000 in some cities such as Dallas, Houston, Austin, San Antonio, Denver, Minneapols-St. Paul and Atlanta.
I've seen quite a few NICE condos in downtown Seattle for $225,000-$275,000 for a 1 bed/ 1 bath.
If you took out the Twin Cities and saved the rest I would agree. The Twin cities are ery overpriced imo....relatively speaking. Considerably more expensive than the others you mentioned.