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The Hampton Roads area offers some of the best spots in the country for first-time home buyers, according to a new statistical analysis. And one of the municipalities in this area topped the entire national ranking.
WalletHub compared 300 cities of different sizes using 22 key indicators of market attractiveness, affordability and quality of life. The dataset ranges from the cost of living to property taxes to real estate crime and ranks the cities in order.
At the top of the list was the city of Chesapeake, Virginia, which uses relatively high rankings in all three major areas for the best results.
Out of the 300 cities surveyed, Chesapeake ranked fourth overall for quality of life, 24th for the current state of the property market, and 28th for affordability.
Gilbert, Arizona finished second in the rankings, followed by Lincoln, Neb. (Top quality of life segment); Cape Coral, Florida; Boise, Idaho; Hampton, Virginia; Peoria (those in Arizona, not Illinois); Virginia Beach; Norfolk; and Surprise (a city in Arizona and yes, that’s its real name).
The nine cities that ranked worst of the 300 first-time buyers were all in California; Boston also ranked in the top 10, ranking 291st.
Among other Virginia cities, Newport News was ranked 23rd, Portsmouth 50th, Roanoke 65th, Richmond 73rd and Alexandria 137th. The Old Dominion actually scored a triple play: Virginia Beach was the highest rank of the major cities, Chesapeake the highest rank of the medium-sized cities, and Hampton the highest rank of the smaller cities. (Full dates and rankings can be found at https://bit.ly/3hIndoa.)
Tidbits from the survey:
• Frisco, Texas, ranked 22nd overall but was the front runner for the state of its property market, and Toledo, Ohio, ranked 33rd nationally but front runner in terms of affordability.
• New York City had the highest cost of living and Laredo, Texas the lowest.
• Toledo, Ohio has the cheapest housing (median house price divided by median annual household income) at 1.06, which is 19.1 times cheaper than Santa Barbara, California, the city with the least affordable housing a ratio of 20.29.
• Honolulu has the lowest real estate tax rate at 0.29 percent, 12.9 times lower than Waterbury, Connecticut, the city with the highest (3.74 percent).
• Rochester, NY has the highest rental-to-price ratio at 15.88 percent, 4.7 times higher than Sunnyvale, California, the lowest city at 3.38 percent.
• New Orleans has the lowest total energy bills per month at $ 97.27, 4.8 times lower than Honolulu, the city with the highest $ 470.38.
• Port St. Lucie, Florida has the lowest property crime rate of its 300 parishes, with St. Louis having the highest.
In 2020, 40 percent of all single-family home purchases in the United States were first time buyers, and 14 percent more people became first time buyers than last year. The growth was due in part to the fact that interest rates fell dramatically during the COVID-19 pandemic, resulting in an economic free fall, albeit for a relatively brief period.
What should prospective buyers think about when deciding when and where to start the home buying process?
“There are clear factors related to affordability, safety, commuting and convenience in the neighborhood like parks and walking trails, but if there is one important consideration to keep in mind for first-time home owners, it is exit strategy,” said Patricia Ryan, professor of finance and real estate at Colorado State University.
Are you coming back, Professor?
“The homeowners are first-time buyers and will likely want to move up in a few years,” said Ryan. “Will the house and the neighborhood be attractive to future first or second buyers? I recommend first-time buyers make a list of musts and wants for them, as well as their perceived musts and wants for other buyers. [Taking into consideration the wants of future buyers] will make the exit easier and ideally more profitable. “
But don’t forget that first, visceral response to home and community, added John Vogel, professor of business administration at Dartmouth College.
“My theory is that if you buy a house in a neighborhood you want to live in, when the time to sell it, another family will want to live there too,” he said.