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The Easiest & Toughest U.S. Markets for First-Time Homebuyers

The Easiest & Toughest U.S. Markets for First-Time Homebuyers
3 min. read

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Finding affordable homes in some of the nation’s most desirable markets can be difficult, especially for first-time homebuyers. And, recent data released by Zillow shows that today’s first-time homebuyers – who make up 46% of all homebuyers in the U.S. – are more likely to surpass their budgets than those who have purchased homes in the past.

It’s important for first-time buyers to make a sound investment, and to do that, they must understand concerning market trends. In Seattle and San Francisco, for example, the real estate markets include low inventory, weak home value appreciation forecasts, and competitive prices. These factors could make it difficult for first-time buyers to find a suitable home in their desired location and available price point.

To determine the 10 most challenging and 10 least challenging housing markets in the U.S., Zillow examined metropolitan areas on the following:

  • current amount of inventory;
  • median home value;
  • percentage of listings with price decreases;
  • strength of home value appreciation forecast.

Each data point was given equal weighting, and the information used represents each market as of June 2019.

10 Most Challenging U.S. Markets

The majority of cities having the most challenging housing markets are on the West Coast, particularly in California. Topping the list is San Francisco, followed by Seattle and Washington, D.C.

  1. The current median home value in San Francisco is $942,800, and the median listing price per square foot is $503. According to Zillow’s data, home values here have not increased since June 2018, and the share of listings with a price cut in the city is 13.4%.
  2. Seattle’s median home value is $489,400; its median listing price is $295 per square foot. Home values went up just 0.4% since June 2018, and 15.6% of listings saw their prices drop.
  3. Rounding out the top three cities is Washington, D.C., where the median home value is $407,200. The median listing price per square foot here is $238. The share of listings with a price reduction is 14.8%, while values of Washington, D.C., homes have increased 2% since June 2018.

Rounding out the top 10 on the list of most challenging U.S. housing markets are:

  1. Los Angeles, CA
  2. Sacramento, CA
  3. Minneapolis, MN
  4. Denver, CO
  5. San Diego, CA
  6. San Jose, CA
  7. Boston, MA

10 Least Challenging U.S. Markets

Some U.S. markets offer first-time homebuyers desirable locations and low down payments. Zillow used the same data points to determine which U.S. markets are the least challenging right now.

  1. Tampa, FL, tops the list, with a median home value of $215,500, and a median listing price of $145 per square foot. Home values here have increased by 5.5% since June 2018, but the share of listings with a price cut is 21.8%.
  2. Coming in at #2 is Las Vegas. The city has a median home value of $278,700, with a $170 median listing price per square foot. Prices for homes in Vegas went up 6.1% since June 2018, although the share of listings with price reductions is 25.7%.
  3. Taking the third spot is Phoenix, which has a median home value of $267,200 and a median listing price of $163 per square foot. Although 17.4% of properties in Phoenix had a price cut, overall prices have increased by 4.9% since June 2018.

Filling out the rest of the least challenging U.S. housing market list are:

  1. Atlanta, GA
  2. Orlando, FL
  3. Miami, FL
  4. Detroit, MI
  5. Dallas, TX
  6. Nashville, TN
  7. Charlotte, NC

Whether first-time homebuyers are looking for homes in a challenging market like Los Angeles real estate or for property in a less-challenging one like Miami, knowing the city’s current housing market trends can ensure that their real estate investment fits their lifestyle.

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