Out of 300 U.S. cities, Vallejo is the 238th best for first-time home buyers, according to a newly released WalletHub study.
It’s a California thing, it seems. In fact, all top five least affordable cities are in California, and include Los Angeles, San Francisco, Sunnyvale, San Mateo and Berkeley. Half of the six highest cost of living cities — San Francisco, Fremont and Sunnyvale — are also here. None of the top 10 best cities for first-time buyers are in California, while nearly half the worst cites are on the list.
With July being one of the top months for home sales and nearly 40 percent of 2017’s single-family home purchases made by first-time buyers, the personal-finance website WalletHub took an in-depth look at 2018’s Best & Worst Cities for First-Time Home Buyers. To determine the most favorable housing markets for first-time buyers, “WalletHub took the pulse of real estate in 300 cities of varying sizes using 27 key metrics. The data set ranges from housing affordability to real-estate tax rate to property-crime rate,” company officials said. The WalletHub study ranks Broken Arrow, Okla., as the No. 1 best place for first-time home buyers, with an affordability ranking of 55, a real estate market rank of 56, a quality of life rank of 11 and a total score of 67. By comparison, Vallejo’s affordability rank is 142, real estate ranking is 232 and quality of life rank is 263, for a total score of 47.19.
Fairfield, which the report ranks as the 152nd best place for first-time home buyers, has an affordability ranking of 161, a real estate ranking of 141 and a quality of life ranking of 111, for an overall score of 53.66.
Berkeley ranks last, at No. 300; with a total score of nearly 36; an affordability rank of 296, a real estate rank of 283, and a quality of life rank of 197.
To determine the most favorable housing markets for first-time home buyers, WalletHub compared a sample of 300 U.S. cities (varying in size) across three key factors: affordability, real-estate market and quality of life.
Each city was categorized according to population-size guidelines: with large cities having more than 300,000 population; midsize ones between 150,000 to 300,000 and small cities fewer than 150,000 people. Vallejo is considered a small city.
When ranked by size, Tampa is the No. 1 large city, Boise, the No. 1 midsize and Broken Arrow the No. 1 small city. In this ranking Vallejo is No. 110 in small cities, right between Miami Gardens, Fla., at 109 and Escondido, at 111. Berkeley is No. 140 — last in the small city category.
This does not surprises Solano Association of Realtors President Johnny Walker, he said.
“It’s no surprise that Vallejo and nearly all other Bay Area cities do not rank higher in WalletHub’s Best & Worst Cities for First-Time Home Buyers,” he said. “When factoring nationwide considerations like housing affordability, cost of living, property taxes, energy costs and rent to price ratios, coastal California and the Bay Area specifically, are just too expensive to appeal to many first-time home-buyers.”
The term “affordable” is extremely relative, he said. “Even while Vallejo remains the most affordable community in the region, affordable becomes more and more subjective with the continued rising cost of housing here pushing people out of the market or pushing them into markets further east,” Walker said. “The report also highlights communities relatively close to us which are now more appealing to first-time home-buyers such as Fairfield, Vacaville, Sacramento and Stockton. Due to economic necessity, folks are choosing to commute from these eastern locations into the Bay Area for employment. While home prices keep climbing, mortgage rates slowly increase and little new supply being added, even once-affordable Vallejo no longer seems as affordable as it once was.”
Contact Rachel Raskin-Zrihen at (707) 553-6824.