Buyers fresh to the market are necessary—often, as a catalyst for other transactions. Currently, first-timers are in limbo, unable to afford or compete against the demand for scarce supply. At the entry level, there were 17.1 percent fewer options for sale at the beginning of this year than at the start of 2017, and first-timers generally have no proceeds from a prior sale to spend.
Buyers do have, however, opportunities for success. According to an analysis recently released by Zillow, first-timers should focus their search on the Southeast, where better conditions exist: affordable and available inventory, and appreciation that is expected to strengthen.
“More and more millennials are reaching the point in their lives where they are ready to buy a home, but they are entering a highly competitive housing market that has been plagued by low inventory, especially among entry-level homes,” says Aaron Terrazas, senior economist at Zillow. “Southeastern markets will be easiest for new buyers, where homes are more affordable and there’s less competition.”
According to the analysis, the best markets are:
- Tampa, Fla.
- Indianapolis, Ind.
- Houston, Texas
- Orlando, Fla.
- San Antonio, Texas
- Saint Louis, Mo.
- Philadelphia, Pa.
- Atlanta, Ga.
- Las Vegas, Nev.
- Dallas, Texas
Analysts based the list on markets with appreciation that is expected to be robust; a “Breakeven Horizon” that is relatively short (the Breakeven Horizon is the length of time before owning a home becomes better financially than renting one); favorable inventory-to-household ratios (an indicator of inventory); concentration of price reductions; and lower median values.
For more information, please visit www.zillow.com.