College towns proved to be resilient during the housing downturn, and the appeal is still showing few signs of cooling off. As student loan debt takes a bite out of their monthly incomes and makes it harder for millennials to save for a down payment, markets that are home to a major university are increasingly desirable.
These days, universities draw not just students and professors, but also retirees looking to stay actively engaged. Terry and David Miyamoto bought a home in Charlottesville near the University of Virginia. "The Lifelong Learning Institute was important to us, and we've already taken one class there and registered for three more for next semester," David said.
First-rate medical facilities, college sports and cultural events are also big draws. "This bodes well for strong housing demand and peak prices in these communities," said real estate broker Dolly Lenz.
Investors looking for a steady rental supply are also looking to college towns. Students now are looking for high quality off-campus housing and the supply has not kept up with the demand in many college towns.
According to Harrison Street Real Estate Capital, an investor in student housing, most public schools can only accommodate 30 percent or less of their student body in what are often obsolete on-campus dormitories. Due to continued state-funding cutbacks, they are unable to build new housing to close this housing gap.
International interest in an American education has helped fuel local real estate markets. KB Homes CEO Jeffrey Mezger noted in an earnings conference call this week that sales in Southern California have been boosted by the university system.
"The primary motivator seems to be getting into investing their money in a solid real estate investment and getting their children into a preferred school district in California and, in turn, hopefully, someday a UC (University of California) college education," he said.
University and college towns are also likely to house vibrant economies. Look no further than Silicon Valley or Research-Triangle Park, North Carolina, to see university-spawned start-up tech companies.
So what does $1 million buy you in a college town? As with all real estate, it's local, but we'll educate you in six markets where our CNBC correspondents matriculated.
Read MoreMillion dollar homes: Reclaimed
On Friday, CNBC reporters will showcase properties near their alma maters in the latest twist on the "Million Dollar Home Challenge." Beginning in "Squawk Box," viewers will have the chance to vote live during to determine which home graduates to the next level. The winner will be crowned on "Closing Bell."
Follow along on Twitter with the hashtag #milliondollarhome.