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Boston is one of the worst markets for first-time homebuyers

by Van Moody

boston-emerging-real-estate-market-2017

First-time homebuyers have a daunting decision to make, and each area has unique advantages and disadvantages to buying there. As far as the nation’s metropolitan areas go, Boston has one of the worst markets for those looking to purchase their first place, according to a recent Zillow.com report.

In fact, it is the 8th worst market for first-time buyers. Boston scored low on Zillow’s spring 2017 First-Time Homebuyer Index, an indicator that measures five different metrics before ranking each city on a scale of zero to 10. The categories for ranking are: median home values, Zillow home value forecast, inventory-to-household ratio, percent share of listings with price cuts and local buy-rent breakeven horizon, which shows how long a homebuyer will recoup their investment.

Zillow combined the scores from each of those categories to calculate a first-time buyer index, which shows on a scale of zero to 10 how friendly a market is to first-time buyers. Higher scores indicate a stronger first-time buyer market, and Boston only scored a .60.

How Boston fared

Boston holds a notably high median home value of $419,000, the sixth-highest in the country and a steep number for young people, who make up the majority of first-time buyers. More affordable metropolitan areas have much lower median home values, such as Atlanta’s $175,800 average, according to Zillow.com.

Another factor that doesn’t fare well for first-time buyers is Boston’s lack of inventory, a problem that has plagued the city’s housing market recently. Boston’s inventory sits at 9,903 available properties, which puts Boston in the middle of the pack but behind some cities with much smaller populations, according to Zillow.com. Compared with Atlanta, which has a smaller population than Boston but 28,888 available homes in inventory, the number is troubling.

The amount of Boston listings with price cuts lies at only 10.3 percent. Only seven cities have fewer listings with price cuts, according to Zillow.

Listings that have had at least one price cut indicate a less competitive market for first-time buyers. A less competitive market allows buyers both an easier search and overall purchasing process. Boston currently has one of the most competitive housing markets compared with other United States cities, according to Zillow.com. Those hoping to purchase a home there will have to dig deeper in order to find the best deal for them amidst heavy competition from other potential buyers.

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Comments

  • Ralph says:

    Good article and I see a positive in Boston being bad for FTBH’s. Purchasing shouldn’t only be about location. I tell my clients it should be about affordability, family dynamics, work proximity, budget conformability, equity and wealth accumulation, etc. It’s why towns and city’s outside of Boston are better, for now, in my opinion. It allows for forward progress in life.

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