If you thought that Florida with its pristine coastline and five million dollar villas could never be a market for first-time homebuyers, think again. According to an analysis on the best markets for first-time homebuyers by Zillow [1], Tampa, Florida is the best market for all those buyers looking at owning their first home.
For this analysis [2], Zillow looked at median home values where markets with lower home values scored higher for their relative affordability; home value forecast, where markets with stronger forecasts for 2018-19 scored more as a good indicator to grow equity and wealth; inventory-to-household ratio where markets with more inventory per household were given higher points as a measure of available supply for buyers; share of listings with price cuts to gauge the competitiveness of the market; and the local buy-rent breakeven horizon where markets with a shorter breakeven horizon demonstrated a stronger financial incentive for buying over renting. The cities were then ranked on the basis of the average of all these parameters.
Tampa, Florida was ranked No 1 on this list of cities with a population growth of 1.9 percent and home values calculated by Zillow at $195,000. It also scored high on breakeven horizon and share of listings with price cuts. The inventory for the city was calculated to be 13,733 homes, while its share of listings with price cuts stood at 18.7 percent.
With home values at $143,000 and share of listings with price cuts at 16.4 percent, Indianapolis, Indiana came in a close second. However, its inventory of 6,476 homes was one of the lowest on the list.
Despite the hurricanes that lashed the city last year, Houston Texas took the third spot in the rankings with a median home value of $186,800 and an inventory of 26,275 homes. The city had a breakeven horizon of 1 year and 10 months, with the share of listings with price cuts at 16.7 percent.
Orlando, another Florida city also made it to the list with home values at $216,100 and an inventory of 9,351 homes. San Antonio, Texas rounded off this list with home values estimated at $169,300 and inventory at 8,036 homes.