Tampa topped the national Best Cities for First-Time Homebuyers list in 2019. The list comes from a housing report published by Zillow on March 19th, 2019. Zillow ranked the largest 35 metros in the U.S. by order of their ease for first-time homebuyers. With Tampa on top, the other top contenders include:
- Las Vegas
Zillow also included the worst markets for first-time buyers in their research. The 10 worst (most challenging) markets for first-time buyers include:
- San Francisco
- Washington, DC
- Los Angeles
- San Diego
- San Jose
Florida Is Great for First-Time Buyers
Three large metros in Florida ranked in the top 10 best places for new buyers. Florida’s housing market has generally been favorable for buyers over recent years, with consistent expansion and plenty of choices in different price ranges.
Tampa is especially friendly for new buyers because of its large housing inventory and low median home value in comparison to the national average. Furthermore, Tampa is consistently ranked as one of the best cities to live in the U.S., making it an even more desirable place to buy a home.
California Has Some of the Worst Housing Markets
San Francisco is known all over the world for having a highly competitive, difficult housing market. Not only are the average home values in this city far higher than the national average, but the inventory is also highly constricted. This makes San Francisco a very competitive market that’s very difficult to navigate, especially for first-time homebuyers.
Los Angeles, Sacramento, San Diego, and San Jose have similar problems as San Francisco. Along with these Californian cities, you’ll also see other western cities like Seattle and Denver.
What Determines the Best Home Markets for First-Time Buyers?
For first-time homebuyers, the criteria for a successful purchase is finding and moving into a home they love, can afford, and that will grow in value over time. World Property Journal states that 46% of homebuyers in the U.S. are buying for the first time. As the millennial generation grows into home buying ages, they’re rapidly becoming the largest demographic of new buyers.
Zillow’s first-time homebuyers’ rankings are based on four factors. These are:
#1 Median home values: Lower median home values are better for new buyers because they require a smaller down payment. Higher median home values are more challenging for first-time buyers.
#2 Forecasted home value appreciation: To be considered better for first-time buyers, a high forecasted value is favored. This indicates that a buyer’s wealth will grow steadily over time.
#3 High inventory-to-household ratio: A higher inventory-to-household ratio means there is plenty of homes for sale. A good supply of homes indicates lower competition, which is better for first-time buyers. Traditionally, first-time buyers have a more difficult time beating out other buyers who have purchased a home already.
#4 Large inventory of price cuts: When more home listings in the area have price cuts, it’s easier for new buyers to find a home they can afford.
Housing Market Shifts in 2019
The housing market continues its slow cooling trend. Markets heated up for years and became pricier and more competitive nationwide. While 2019 still looks like a strong year for the housing market, there is a cyclical shift toward a buyer’s market.
One of the telling signs that the housing market is shifting to a buyer’s market is an increase in homes for sale across the country. Inventory is up 1% from last year. This means there are more homes on the market for first-time buyers to choose from. The higher the housing inventory levels, the better deals buyers can negotiate.
Having more homes on the market is also useful for first-time buyers because it means there are likely to be more starter homes. While some markets may have an abundance of high-value homes year-round, national averages suggest that housing inventories are generally up this year across all price ranges. First-time buyers will have a better chance of finding a home they love in their budget.
Graystone Investment Group
Graystone Investment Group is an experienced real estate wholesaler in Tampa Bay.
Unlike other wholesaling groups, we provide clients with a turnkey process at no extra charge. We find properties that we resell to investors at discount prices, while also connecting them with private financing. We also coordinate with rehab and management companies we’ve worked with for years.