SEATTLE, May 12, 2017 /PRNewswire/ -- First-time
homebuyers will have better luck in the Southeast if they are
looking for a more affordable home, according to a new analysis
from Zillow®. Orlando and
Tampa top the list as the best
markets for first-time buyers, with affordable homes and relatively
more inventory than other markets. Also making the list are
San Antonio, Atlanta, and Dallas. These markets are less competitive,
and buyers will see strong growth over the next year as they begin
to accumulate equity.
Zillow's list of the best markets for first-time buyers is based
on five metricsi:
- Lower median home value for a more affordable down payment
- Strong home value forecast as an indicator of building
equity
- Higher inventory-to-household ratio to capture available
supply
- Shorter Breakeven Horizon to show a financial advantage of
buying over renting
- Greater share of listings with price cuts to indicate a less
competitive market
While first-time buyers make up nearly half of recent buyers,
according to the 2016 Zillow Group Report on Consumer Housing
Trends, having enough saved for a down payment could be holding
first time buyers back in certain markets. More than two-thirds of
renters say that saving for a down payment is the biggest barrier
to homeownershipii. In all but three of the 10 best
markets for first-time buyers, the median home value is lower than
the national median home value, which means they require less money
up front as a down payment.
The Bay Area and Pacific
Northwest have strong job markets, but new buyers will have a tough
time entering the market due to low inventory and high home prices
– buyers in these areas will have to come up with more than
$70,000 as a down payment. However,
those looking to buy in Florida
only need to put about $40,000 down
on a median home.
"As millennials reach the typical home buying age, they are
coming into a tough housing market with low inventory and lots of
competition," said Zillow Chief Economist Dr. Svenja Gudell. "These markets have more
favorable conditions for first-time buyers to become homeowners.
More challenging metros aren't out of reach for new buyers, but
they should be prepared to face a more competitive buying
environment."
Ten Best Markets for First-Time Homebuyers
1. Orlando, Fla.
2. Tampa, Fla.
3. Indianapolis, Ind.
4. Las Vegas, Nev.
5. San Antonio, Texas
6. Pittsburgh, Pa.
7. Atlanta, Ga.
8. Detroit, Mich.
9. Dallas, Texas
10. Cleveland,
Ohio
A 5 percent down payment in the Bay
Area is larger than a 20 percent down payment in most of the
best markets for first-time buyers. For buyers who can come up with
a down payment, low inventory and few price cuts make these markets
especially competitive.
First-time buyers are more likely to exceed their budget than
repeat buyersiii. Zillow Group recently launched a new
consumer brand, RealEstate.com, aimed at first-time home buyers,
that enables them to search and compare homes based on an "All-In
Monthly Price" which factors in costs like mortgage, property tax
and utilities to have a better understanding of a home's true cost.
Metropolitan
Area
|
Zillow
Home Value
Index
March 2017
|
Breakeven
Horizon
Q1 2017
|
Inventory
|
Households
|
Annual
Forecasted Home Value Appreciation (%)
|
Share of
Listings with
a Price Cut
|
Orlando,
FL
|
$202,900
|
1 year, 11
months
|
10,344
|
845,295
|
3.8
|
17.4
|
Tampa, FL
|
$183,300
|
1 year, 10
months
|
14,998
|
1,166,704
|
3.2
|
18.8
|
Indianapolis,
IN
|
$137,300
|
1 year, 6
months
|
7,706
|
755,100
|
3.0
|
13.1
|
Las Vegas,
NV
|
$219,200
|
2 years, 1
months
|
13,012
|
740,966
|
4.8
|
12.0
|
San Antonio,
TX
|
$158,500
|
1 year, 11
months
|
7,444
|
791,273
|
3.0
|
17.2
|
Pittsburgh,
PA
|
$135,700
|
1 year, 11
months
|
10,830
|
990,355
|
2.5
|
14.9
|
Atlanta,
GA
|
$175,800
|
1 year, 9
months
|
28,888
|
2,028,705
|
3.1
|
12.4
|
Detroit,
MI
|
$138,700
|
1 year, 7
months
|
13,919
|
1,674,251
|
3.2
|
12.7
|
Dallas-Fort Worth,
TX
|
$205,300
|
1 year, 8
months
|
16,331
|
2,479,995
|
4.4
|
13.7
|
Cleveland,
OH
|
$132,400
|
1 year, 11
months
|
10,045
|
849,475
|
1.8
|
14.1
|
Cincinnati,
OH
|
$151,300
|
1 year, 9
months
|
6,160
|
832,607
|
2.7
|
14.2
|
Chicago,
IL
|
$208,400
|
2 years, 3
months
|
37,367
|
3,470,993
|
2.6
|
16.7
|
Kansas City,
MO
|
$155,600
|
1 year, 8
months
|
6,616
|
814,092
|
2.9
|
11.6
|
St. Louis,
MO
|
$149,300
|
2 years, 4
months
|
12,373
|
1,108,303
|
1.5
|
15.0
|
Houston,
TX
|
$174,500
|
2 years, 4
months
|
24,960
|
2,292,992
|
1.5
|
17.9
|
Philadelphia,
PA
|
$216,000
|
2 years, 7
months
|
26,597
|
2,233,752
|
2.3
|
17.3
|
Riverside,
CA
|
$322,700
|
2 years, 5
months
|
14,462
|
1,343,526
|
3.8
|
13.4
|
Charlotte,
NC
|
$170,600
|
1 year, 10
months
|
7,793
|
905,696
|
3.0
|
12.0
|
Miami-Fort
Lauderdale, FL
|
$249,700
|
2 years, 8
months
|
46,142
|
2,077,362
|
0.6
|
15.7
|
Austin, TX
|
$267,500
|
2 years, 5
months
|
6,701
|
723,914
|
3.4
|
15.0
|
Phoenix,
AZ
|
$232,700
|
3 years, 0
months
|
21,607
|
1,608,722
|
1.7
|
20.0
|
Minneapolis-St Paul,
MN
|
$241,900
|
2 years, 1
month
|
9,101
|
1,354,766
|
3.5
|
12.7
|
Columbus,
OH
|
$161,700
|
1 year, 9
months
|
4,858
|
772,304
|
3.0
|
11.2
|
New York,
NY
|
$411,300
|
2 years, 6
months
|
76,798
|
7,125,065
|
3.8
|
11.2
|
Baltimore,
MD
|
$259,200
|
2 years, 10
months
|
11,253
|
1,037,443
|
1.8
|
16.1
|
Sacramento,
CA
|
$361,000
|
2 years, 5
months
|
4,276
|
809,295
|
4.7
|
8.4
|
Seattle,
WA
|
$426,300
|
2 years, 3
months
|
6,181
|
1,437,222
|
4.8
|
5.6
|
Denver, CO
|
$362,800
|
2 years, 5
months
|
6,130
|
1,075,919
|
3.3
|
9.2
|
Boston, MA
|
$419,900
|
2 years, 9
months
|
9,903
|
1,782,655
|
3.1
|
10.3
|
Washington,
DC
|
$382,900
|
4 years, 6
months
|
17,478
|
2,172,310
|
1.2
|
13.9
|
Portland,
OR
|
$359,800
|
2 years, 11
months
|
5,306
|
901,402
|
2.7
|
9.8
|
San Diego,
CA
|
$532,000
|
4 years, 6
months
|
5,976
|
1,113,610
|
0.9
|
10.6
|
Los Angeles-Long
Beach-Anaheim, CA
|
$601,900
|
4 years, 8
months
|
17,364
|
4,315,637
|
0.8
|
10.7
|
San Jose,
CA
|
$986,000
|
5 years, 1
month
|
1,596
|
651,352
|
0.9
|
7.0
|
San Francisco,
CA
|
$843,200
|
4 years, 11
months
|
4,155
|
1,689,907
|
0.6
|
6.2
|
Zillow
Zillow® is the leading real estate and rental marketplace
dedicated to empowering consumers with data, inspiration and
knowledge around the place they call home, and connecting them with
the best local professionals who can help. In addition, Zillow
operates an industry-leading economics and analytics bureau led by
Zillow's Chief Economist Dr. Svenja
Gudell. Dr. Gudell and her team of economists and data
analysts produce extensive housing data and research covering more
than 450 markets at Zillow Real Estate Research. Zillow also
sponsors the quarterly Zillow Home Price Expectations Survey, which
asks more than 100 leading economists, real estate experts and
investment and market strategists to predict the path of the Zillow
Home Value Index over the next five years. Launched in 2006, Zillow
is owned and operated by Zillow Group (NASDAQ:Z and ZG), and
headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
|
|
|
i The
First-time Home Buyer Index, ranging from 0 to 10, captures a
balance of five metrics: low median home values for an affordable
down payment, a strong home value forecast to indicate a good start
to growing equity, a larger inventory-to-household ratio to capture
available supply, a greater share of listings with price cuts to
surface less competitive buying experiences, and a faster breakeven
to demonstrate a strong incentive to buy over rent. These five
metrics are ordered and metros are scored on a scale from 0 to 10
along a uniform distribution. These five scores are then averaged
and the average re-scaled to range from 0 to 10.
|
ii
https://www.zillow.com/research/down-payment-hurdle-zhar-14790/
|
iii
https://www.zillow.com/research/zillow-group-report-2016-13279/#buyercharacter
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/orlando-is-the-best-market-for-first-time-homebuyers-west-coast-markets-tougher-for-the-first-time-buyer-300456635.html
SOURCE Zillow