Beyond country music, world-famous barbecue and one-of-a-kind hospitality, you’ll find the nation’s best real estate markets in Texas — the cities of Frisco, McKinney and Allen took the top three spots WalletHub’s 2017 list.
WalletHub analysts compared 300 small-, mid- and large-sized cities across 21 indicators of housing market strength and attractiveness that include factors such as home value forecast, average number of days on market, buy vs. rent breakeven horizon, housing affordability and job growth rate.
Frisco nabbed the no. 1 spot thanks to a top-notch ranking for both the real estate market and affordability and economic environment indicators.
This Texas town ranked no. 1 in share of young homes (homes built between 2010 and 2015), building permit activity, population growth rate, and the job growth rate — all of which contribute to better affordability for buyers at all levels, especially first-time buyers looking for starter homes.
The small town did fall short in a few areas, such as the buy vs. rent breakeven horizon, which refers to the number of years it takes for buying a home to become less expensive than renting (ranked no. 178), and the ratio of rent price to sell price, where it ranked 150.
Hone your systems to maximize your real estate lead ROI
Develop a smart system and apply it consistently to get results READ MORE
Home value forecast: 3.08 percent Median home-price appreciation: 54.06 percent Average number of days until a house is sold: 47.0 Share of homes selling for a gain: 99.26 percent Ratio of rent price to sale price: 7.85 percent Foreclosure rate: 0.0180 percent Vacancy rate: 4.17 percent Buy vs. rent breakeven horizon: 32 Share of young homes: 10.4 percent Population growth rate: 33.6 percent Job growth rate: 27.5 percent Average credit score: 726
The other Texas towns that rounded out the top spots, McKinney and Allen, also had strong shares of young homes, robust building permit activity, population and job growth rates, and large percentages of homes that sell for a profit.
This falls in line with previous studies that have Texas as the best state for first-time buyers thanks to an overall lower cost of living compared to expensive coastal cities, a booming residential and rental construction landscape, relatively low real estate taxes and great home price appreciation.
On the other hand, WalletHub determined that New Jersey is home to some of the worst real estate markets — Newark, Paterson and Elizabeth. Newark ranked nearly last on each of the indicators.
Home value forecast: 4.43 percent Median home-price appreciation: -21.11 percent Average number of days until a house is sold: 185.5 Share of homes selling for a gain: N/A Ratio of rent price to sale price: 7.99 percent Foreclosure rate: 0.1221 percent Vacancy rate: 15.94 percent Buy vs. rent breakeven horizon: 26 Share of young homes: 1 percent Population growth rate: 1.9 percent Job growth rate: 1.8 percent Average credit score: 580The numbers reflect the city’s fight to recover from high poverty, crime and unemployment rates over the past few decades. Paterson and Elizabeth fared about the same as Newark, with the three New Jersey towns consistently being ranked side-by-side in the individual real estate market indicators.
As WalletHub researchers pointed out, a healthy real estate market doesn’t necessarily translate to it being a good time to buy. Over the past couple years, many real estate experts, economists and professionals have wondered why homeownership has all but stalled even with a healthy jobs market and historically low interest rates.
Thomas Nesslein, an associate professor and chair of the Urban and Regional Studies Department at the University of Wisconsin, zeroed in on the elusive millennial generation that somewhat failed to meet buying predictions and expectations.
Nesslein echoed the sentiments of many researchers when he said insufficient down payments due to large amounts of student loan and other debts are the main part of what’s plaguing would-be millennial buyers.
“The key reason millennials are still sitting out of the housing market is that they have insufficient savings for down payments, and thus fail to meet the stricter underwriting standard prevailing since the 2007/2008 financial crisis,” he said. “The millennials are widely said to be those born between 1982 and 2004.”
“With respect to those millennials in their late 20s or early 30s, options to improve their ability to purchase a home are very limited,” Nesslein added. “Through great discipline and sacrifice, they must improve their credit scores and saving rate.”
The professor suggested millennials begin thinking of ways to reduce the amount of student loan debt by foregoing high-priced Ivy League schools and finding cheaper schools that offer a great education and better access to scholarships, grants and other programs to reduce out-of-pocket costs.
San Francisco-based economist Bruce Wydick said this isn’t the right time to buy a home: “Now is probably not the best time for most people to buy houses. Generally, the best time to buy a house is in a recession, when prices are low,” said Wydick. “Right now, we are not in recession; we are in an economic boom, and housing prices reflect the strong economy in most regions of the country.”
Other experts cited in the report suggest many of the same things Nesslein and Wydick did and strongly urged buyers to take advantage of low interest rates before the Fed begins bumping them up.
Source: click here
Loading ...