July 18, 2017 | Jack Jenkins Homes
Hoping to buy your first home? Texas is calling. New analysis by finance site WalletHub has found that the Lone Star State boasts four of the top 10 cities for first-time home buyers in 2017.
WalletHub came to this conclusion after analyzing 23 metrics important to home buyers—from affordability to quality of life to crime rates—in 300 cities of varying sizes, including small ones with populations under 150,000. McKinney, TX, was dubbed the very best destination for first-time buyers, followed by Frisco, Allen, and (further down, at No. 7) Richardson. Check out the full list below.
Best places for first-time home buyers
- McKinney, TX
- Frisco, TX
- Allen, TX
- Cary, NC
- Norman, OK
- Lincoln, NE
- Richardson, TX
- Boise, ID
- Thornton, CO
- Murfreesboro, TN
Texas dominates this list for good reason.
“Cities in north Texas have very healthy housing markets and a high percentage of homes sold in the past year,” explains WalletHub analyst Jill Gonzalez. “Construction is flourishing in general, with high percentages of housing units built within the last five years.”
And real estate experts who actually live and build in the area agree that these cities are indeed great places to put down roots.
“I happen to live in McKinney, right on the border of Frisco, very close to Allen,” says Randall Yates, CEO of The Lenders Network. “McKinney and Frisco are both growing at an extremely rapid rate. The majority of the communities in the Mckinney/Frisco/Allen areas are considered affluent, and home prices are reasonable. For instance, I recently had a two-story home built for $440,000, which is now worth over $550,000. There are many very nice homes in these areas that are fairly new and priced well below what they would be in other areas of the country.”
Plus, price aside, the region is tough on crime.
“The crime rates are low, police are active, and the Collin County court system is very tough compared to Dallas County—so tough, in fact, that criminals will not move to Collin or are trying to get out,” Yates adds. And what’s bad for criminals is good for home buyers, of course!
Worst places for first-time home buyers
Meanwhile, real estate newbies might want to flee California (if they haven’t already), which has seven of the 10 worst cities for first-time home buyers. El Monte, CA, tops this list; see the full rundown below.
- El Monte, CA
- New York, NY
- San Mateo, CA
- Newark, NJ
- San Francisco, CA
- Miami Beach, FL
- Santa Monica, CA
- Oakland, CA
- Berkeley, CA
- Santa Barbara, CA
The reason for this boils down largely to price.
“The California cities that rank low have restrictive housing costs,” says Gonzalez. “Due to high prices, the percentage of houses sold in the last year is quite low and building in the past five years has not been prioritized.”
Why home affordability is key
Given that first-time home buyers are generally strapped for cash compared with repeat buyers, this list can certainly point them in the right direction on where to find the bargains and break into the housing market.
“First-time buyers typically struggle to save enough for down payments, so the more affordable the home, the easier it is to get on the property ownership bandwagon,” says Gary Beasley, founder of Roofstock. “On a per-square-foot basis, prices in some of these less affordable markets are literally 10 times the prices of those in some of the most affordable markets, which is staggering. Unless you are selling a home in these pricey markets, it is next to impossible for first-time home buyers to compete.”
Yet some experts warn that price shouldn’t be the only consideration when deciding where to live.
“Price alone is not the only factor when it comes to first-time home purchases,” Janine Acquafredda, associate broker at House-n-Key Realty, in New York City. “There are much more employment opportunities and recreational options in places like New York and Miami, which were among the worst places for first-time home buyers.”
And while a standalone house in New York will definitely cost you more than a million bucks, Acquafredda points out, there is a variety of cheaper options to choose from—studios, apartments, co-ops, condos—that might be more suitable for first-time home buyers anyway.
Another consideration? “This study seems to focus on the ‘potential’ of a property, namely the chances of making a profit when you sell,” says Shane Lee, a statistical data analyst at RentHop. “Although most first-time buyers tend to sell their first homes after a few years, more and more millennial buyers are skipping beginner homes. Buyers who are looking to purchase a permanent house should put less emphasis on real estate market metrics like price.”
In other words, although bargains are out there, don’t get sucked in by price alone when looking for a home.
The post The 10 Best and Worst Cities for First-Time Home Buyers in 2017 appeared first on Real Estate News & Insights | realtor.com®.
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