A Zillow report published on March 19th, 2019, detailed homebuying conditions around the country for first-time buyers, including naming the best and worst markets. The report again shows that Tampa, Florida continues to be named among the best housing markets in the U.S. As a matter of fact, in Zillow’s 2019 report of best markets for first-time homebuyers, Tampa takes the top spot.
Tampa is Best Priced, Least Competitive
This is the second year in a row that Tampa has topped Zillow’s list as the best market for first-time homebuyers. Higher levels of inventory in Tampa, paired with favorable prices and lower competition, make Tampa a consistent winner for first-time homebuyers.
“The shortage of starter homes across the country is finally starting to ease, and that’s good news for would-be first-time buyers who have been saving up to make the leap into homeownership,” Skylar Olsen said, quoted in Zillow’s press release. “Unfortunately, prices of homes in the lower third of the market have risen so much in recent years that for many households’ budgets they no longer qualify as affordable. But markets like Tampa and Las Vegas still provide plenty of bargains.”
Development in Tampa remains strong. As the metro grows, it’s likely that the housing market will remain strong, continuing to benefit first-time homebuyers with new inventory coming on the market and resulting in stable prices.
Best Homebuying Markets are in Florida
Out of the top 10 best markets for first-time homebuyers, 3 are in Florida. All 3 Florida cities are ranked in the top 6. While Florida occupies 30% of the list, no other state has more than 1 city ranked in the top 10, reflecting the overall strength of the Florida housing market.
Besides Tampa, the other 2 Florida cities on the top 10 list are Orlando in 5th and Miami in 6th. Along with Tampa, these cities are consistently favorable for homebuyers, with low median home values and lower competition.
Besides the cities in Florida, metros on the buyer-friendly top 10 list include:
- Las Vegas (#2)
- Phoenix (#3)
- Atlanta (#4)
- Detroit (#7)
- Dallas (#8)
- Nashville (#9)
- Charlotte (#10)
Las Vegas is potentially the most surprising on the list. However, the data shows that median home values in metro Las Vegas are low compared to the rest of the country.
Toughest Markets for First-Time Homebuyers
On the opposite end of the spectrum, West Coast metros took up 6 out of the 10 spots for the most challenging markets for first-time homebuyers. California alone accounts for 50% of the list, alongside Seattle. Washington D.C. and Boston are the only East Coast cities mentioned as most challenging for first-time homebuyers, with Minneapolis and Denver filling in the rest of the list.
San Francisco was ranked as the most challenging market with Seattle in second. Both cities have notoriously competitive markets and median home values far above Zillow’s national average of $226,700 ($1,353,500 and $726,500 respectively). By comparison, Tampa is the friendliest market for first-time homebuyers with a median home value of $224,300.
There are four metrics Zillow used to calculate how friendly a housing market is for first-time buyers:
- Low median home value that requires a smaller down payment.
- Strong forecasted home value appreciation.
- High inventory-to-household ratio.
- High share of listings with a price cut.
Markets that are friendlier to first-time buyers tend to do well with all 4 metrics. First-time buyers don’t tend to have the collateral or financial resources available for larger home loans and down payments, which works out well in markets with lower median values and higher price cuts.
Higher inventory-to-household ratios indicate that more houses are available, meaning there will be less competition for houses. For first-time homebuyers, lower competition helps to keep prices low and makes the buying process easier. Furthermore, a market forecast for high home value appreciation means that homebuyers may be able to grow their wealth more quickly over time.
Marimark Mortgage is based in Tampa, Florida and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients with HARP refinancing to lower their monthly mortgage payments.