WalletHub, a personal finance website, recently published its report on the best cities in the country for first time home buyers.  Wallet Hub considered the following city indexes in determining its rankings: affordability and quality of life, market attractiveness, cost of living, property taxes, median home prices, appreciation, recovery and foreclosure rates, crime rates, rent-to-price ratios, number of homes sold, job market, city size, etc.

Texas cities snagged the top three slots as the most favorable cities to first time home buyers.  McKinney came it first.  (It was also Money Magazine’s 2014 “Best Place to Live in America” winner.)  Frisco, home to the Dallas Cowboys and its $1.5B headquarters came in second and Allen, a neighboring city of Frisco, came in third.  Texas also offered up just under a dozen additional cities that were favorable to first time home buyers as well.

Downtown McKinney, TX

So, what’s going on in Texas these days to make these cities so attractive to first time buyers?  Courtney Huggins, a Certified Negotiation Expert (CRE) with Keller Williams McKinney said, “…there is a large migration of people to Texas…from California who find our home prices to be very affordable in comparison to CA prices… so they don’t hesitate to pay over the list price (thus driving prices up) for a home if they need one.”

Suburban areas such as McKinney, Frisco and Allen are more affordable than white hot markets of Dallas-Fort Worth but still, all the Texas cities continue to be seller’s markets due to low interest and foreclosure rates and loan programs that allow first time buyers to put down as little as 3.5%.  Huggins does acknowledge “…in highly desirable, established residential neighborhoods or newly build communities, first time buyers find themselves in fierce bidding wars…for homes in the range of $250,000. and less…but buyers are not intimidated by this…”

The least favorable cities for first time home buyers are Miami and California’s San Francisco, Santa Monica, Oakland, Berkeley and Santa Barbara.  Raleigh comes in first among cities with 300,000 residents; Oakland comes in as the worst for first time home buyers.  In terms of cost of living, Laredo comes in first and New York City comes in last. Yonkers has the lowest crime rate and Miami has the highest.


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