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Middle-Class Affordability is Declining for Homebuyers in 70% of America’s Largest Cities

Bucking the trend, Birmingham, Baltimore and Philadelphia all saw an increase in the share of affordable homes.More than two-thirds of the 53 biggest U.S. housing markets saw the share of homes affordable to the middle class decrease between 2014 and 2019, according to an analysis by Redfin. Affordable homes were more …

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The Most and Least Affordable Housing Markets for a Renter to Become a Homeowner

For first-time homebuyers, dim prospects in California, but cities between the coasts shine.The typical renter household could afford half of the homes in only five of the nation’s largest markets in 2019, according to an analysis by Redfin.To determine the share of homes sold that would be affordable …

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Survey: What Do First-Time Homebuyers Want From the Government? Lower Interest Rates

Lower interest rates beat out tax credits, easier lending standards, and increased home construction according to a new Redfin survey

Interest rates are currently at historic lows, but 66% of first-time homebuyers would like them to be even lower according to a new survey conducted by Redfin.

What would you like the government to do to make it easier to buy your first home? (Income)

The three most popular government actions among first-time homebuyers—lowering interest rates, providing tax credits, and easing lending standards—would all make homebuying more affordable in the short-term, but none would directly address the long-term shortage of affordable homes. Only 24% of respondents would like the government to encourage more home construction, even though it could increase the number of affordable homes for sale in the long-term. 

First-time homebuyers with household incomes under $100,000 were the most in favor of lower interest rates, with 69% selecting the option. Recently, the Federal Reserve Bank (which isn’t technically a branch of the government, but does set United States monetary policy) lowered interest rates in an effort to keep the economy growing. But, the Fed has acknowledged that the economic expansion hasn’t benefited everyone equally, and low-income families have been especially left behind. Chairman Powell stated in the past that the strength of economic indicators, “mask important disparities by income, race, and geography.”

What would you like the government to do to make it easier to buy your first home? (Race)

Across all race-groups, first-time homebuyers are in favor of lower interest rates, but that’s especially true among Black homebuyers, with 75% saying that government intervention would make it easier to buy a single-family home. Black Americans increasingly struggle to break into homeownership, likely a result of the surging affordability crisis, which has been disproportionally hitting Black families.

Methodology

Redfin commissioned a study in December 2019 of more than 3,000 U.S. residents who bought or sold a primary residence in the last year, or plan to in the next 12 months. More than 600 survey respondents identified as first-time homebuyers and were asked what they thought the government could do to make it easier to buy a first-time home.

For more information about the survey and its findings, contact press@redfin.com.

Source: Redfin Blog

Posted on

Survey: What Do First-Time Homebuyers Want From the Government? Lower Interest Rates

Lower interest rates beat out tax credits, easier lending standards, and increased home construction according to a new Redfin survey

Interest rates are currently at historic lows, but 66% of first-time homebuyers would like them to be even lower according to a new survey conducted by Redfin.

What would you like the government to do to make it easier to buy your first home? (Income)

The three most popular government actions among first-time homebuyers—lowering interest rates, providing tax credits, and easing lending standards—would all make homebuying more affordable in the short-term, but none would directly address the long-term shortage of affordable homes. Only 24% of respondents would like the government to encourage more home construction, even though it could increase the number of affordable homes for sale in the long-term. 

First-time homebuyers with household incomes under $100,000 were the most in favor of lower interest rates, with 69% selecting the option. Recently, the Federal Reserve Bank (which isn’t technically a branch of the government, but does set United States monetary policy) lowered interest rates in an effort to keep the economy growing. But, the Fed has acknowledged that the economic expansion hasn’t benefited everyone equally, and low-income families have been especially left behind. Chairman Powell stated in the past that the strength of economic indicators, “mask important disparities by income, race, and geography.”

What would you like the government to do to make it easier to buy your first home? (Race)

Across all race-groups, first-time homebuyers are in favor of lower interest rates, but that’s especially true among Black homebuyers, with 75% saying that government intervention would make it easier to buy a single-family home. Black Americans increasingly struggle to break into homeownership, likely a result of the surging affordability crisis, which has been disproportionally hitting Black families.

Methodology

Redfin commissioned a study in December 2019 of more than 3,000 U.S. residents who bought or sold a primary residence in the last year, or plan to in the next 12 months. More than 600 survey respondents identified as first-time homebuyers and were asked what they thought the government could do to make it easier to buy a first-time home.

For more information about the survey and its findings, contact press@redfin.com.

Source: Redfin Blog

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Redfin Ranks the Most Competitive Neighborhoods of 2019

Half of the neighborhoods with the most competitive housing markets of the year are in the Bay Area, but places in Grand Rapids, MI; Tacoma, WA and Minneapolis also make appearances. 

White Oaks in the Bay Area is the most competitive neighborhood of the year for homebuyers, followed by Alger Heights in Grand Rapids, MI and East Arlington in Boston

Just 12% percent of offers written by Redfin agents on behalf of their homebuying customers nationwide faced a bidding war from January through November 2019, down from 48% in 2018 and 53% in 2017. Although bidding wars have declined on a national level, in the Bay Area, home to half of the 20 most competitive neighborhoods of 2019, it can still be difficult for buyers to win homes. The Boston metro also stands out, with four of the top 20 most competitive neighborhoods, followed by Grand Rapids and Washington D.C., with two apiece. Suburbs of Minneapolis and Seattle (Brooklyn Park and Tacoma) each have one neighborhood on the list. 

That’s according to 2019 rankings from Redfin’s Compete Score, which uses data on the number of competing offers, the number of waived contingencies, how quickly homes go under contract and how much above list price they sell for to determine how difficult it is for buyers to win a home in individual neighborhoods and cities. Each of the top 20 neighborhoods score above 90, which means most homes get multiple offers, often with waived contingencies. In the Bay Area’s White Oaks, for instance, more than 72% of homes sold for above list price from January through November 2019 and the typical home found a buyer in 12 days. 

“While neighborhoods in the Bay Area and Boston are still among the most competitive in the country, robust competition for homes in neighborhoods in Grand Rapids, Minneapolis and Tacoma signals the desirability of more affordable areas,” said Redfin chief economist Daryl Fairweather. “An influx of buyers from more expensive neighborhoods contributes to competition in these affordable neighborhoods, especially if they can make higher offers than local residents when they sell their previous homes.”  

The list below ranks the most competitive U.S. neighborhoods based on an average of monthly stats from January through November 2019. 

Housing market stats for the 20 most competitive neighborhoods in the U.S. 
Neighborhood City Metro area Compete score Sale-to-list price ratio Median days on market Share of homes sold above list price Median sale price: neighborhood (Nov. 2019) Median sale price: metro area (Nov. 2019)
White Oaks San Carlos, CA San Jose 95.5 105.9% 12 72.2% $1,835,000 $1,081,500
Alger Heights Grand Rapids, MI Grand Rapids 95.3 102.9% 7 66.9% $182,000 $207,500
East Arlington Arlington, MA Boston 95.1 103.6% 9 67.4% $770,000 $490,000
Glenview Oakland, CA San Jose 95.0 125.2% 14 84.7% $1,170,000 $1,081,500
Brattle Station Arlington, MA Boston 94.7 103.8% 8 61.2% $693,000 $490,000
Creston Grand Rapids, MI Grand Rapids 94.5 102.0% 6 59.3% $169,000 $207,500
AU Park/Friendship Heights Washington, DC Washington, D.C.  94.2 103.6% 7 57.8% $1,100,000 $414,700
Cambridgeport Cambridge, MA Boston 94.1 104.6% 9 62.6% $815,000 $490,000
Upper Rockridge Oakland, CA San Jose 93.8 115.0% 15 77.8% $1,821,000 $1,081,500
Mission Dolores San Francisco, CA San Jose 93.6 114.3% 15 82.3% $1,660,000 $1,081,500
Bushrod Oakland, CA San Jose 93.6 119.4% 15 86.1% $950,000 $1,081,500
Berkeley Hills Berkeley, CA San Jose 93.5 116.7% 16 84.4% $1,414,000 $1,081,500
Bay Farm Island Alameda, CA San Jose 93.5 105.8% 16 75.1% $1,058,000 $1,081,500
Arlington Center Arlington, MA Boston 93.5 103.2% 10 59.4% $802,000 $490,000
Beresford Park San Mateo, CA San Jose 93.3 105.3% 13 74.8% $1,675,000 $1,081,500
Piedmont Avenue Oakland, CA San Jose 93.3 110.3% 15 74.5% $750,000 $1,081,500
Hartkopf Brooklyn Park, MN Minneapolis 93.2 102.6% 10 65.1% $223,000 $280,000
Fairlington Arlington, VA Washington, D.C.  93.0 101.8% 7 59.1% $485,000 $414,700
Northwest Landing DuPont, WA Seattle 92.8 101.7% 4 50.5% $365,000 $557,000
North Los Altos Los Altos, CA San Jose 92.7 103.3% 12 60.1% $3,173,000 $1,081,500

Of the 10 Bay Area neighborhoods among the most competitive in the country, half are in Oakland. Although the median sale price in Oakland is more than double the national median—$720,000 versus $312,000 for the typical home in the U.S. in November—it’s still well below that of San Francisco ($1.4 million) and San Jose ($1.1 million). 

Oakland Redfin agent Katy Polvorosa said the area has been particularly hot this year, partly because it’s more affordable than neighboring parts of the Bay Area. . 

“I’ve heard a lot of people say the Bay Area housing market is cooling this year, but I’m seeing the opposite in Oakland,” Polvorosa said. “I’m writing offers that are seeing aggressive competition. Homes that are move-in ready and priced right typically receive offers within 12 to 14 days. The Oakland market is so hot that sellers are still expecting and receiving offers that waive contingencies.” 

Although the Bay Area is still home to plenty of competitive neighborhoods, homebuyers are gravitating toward more affordable inland metros as housing markets in coastal job centers have become more expensive. In the third quarter of 2019, 26% of Redfin.com home searchers looked to move to another metro area, with affordable places like Sacramento, Phoenix and Las Vegas as popular destinations. 

The appearance of two neighborhoods in Grand Rapids on this year’s ranking of most competitive neighborhoods is an example of the trend of migration away from more expensive metros. 

“Affordability plus quality of life are big draws to the Grand Rapids area. I’ve worked with buyers from Chicago, California, Hawaii and other expensive parts of the country who are looking here because they can get so much more bang for their buck,” said local Redfin agent Shellie Silva, who moved to Grand Rapids from San Diego three years ago. “Homes in neighborhoods with price points below $275,000, like Alger Heights and Creston, are prone to bidding wars and they tend to sell quickly because they’re even more affordable that some other parts of Grand Rapids.”

In Alger Heights, nearly 67% of homes sold for above list price and the typical home was on the market for one week before going under contract so far this year. And in Creston, 59.3% of homes sold for above list price and the typical home went under contract in just six days. 

Methodology 

Compete Score rates how difficult it is to win a home in an area. Using a combination of Redfin data and data from the multiple listing services (MLS), Compete Score is primarily calculated based on four inputs: number of competing offers, waived contingencies, sale to list ratio, and number of days on market. Here’s more on Compete Score.

The rankings for most competitive neighborhoods include neighborhoods with at least 50 home sales from January through November 2019 for which Redfin has Compete Score data. The rankings in this report reflect an average of monthly stats from January through November 2019.

Some neighborhoods, including those in New York City, are excluded from this report because multiple-listing data is unavailable for many transactions there. 

Source: Redfin Blog