(NEXSTAR) – Portsmouth tops the list for first-time home buyers in 2023, according to an analysis by Realtor.com.
Plentiful housing and reasonable home prices were two main criteria, but the study’s authors also looked for communities where young residents could still enjoy a social life over the weekend and a short commute during the week.
The markets targeted on the list “have local employment markets which are strong enough to support young professionals getting a start in their careers,” Realtor.com Senior Economist George Ratiu said in the report.
The median home list price in what Realtor.com refers to as the metro-Virginia Beach area is $239,000.
The report notes that the historic seaport city “has become popular with first-time and other buyers for one big reason: It’s still affordable for the desirable Hampton Roads region.”
“If you’re trying to save a little money on your mortgage, you can live here and still be able to commute,” says associate real estate broker Heidi Johnson, of Bunch Real Estate.
The city moved up from the fifth spot on last year’s list of the best places for first-time homebuyers to take first place. There are plenty of good jobs, including many military ones, in the city of about 100,000 thanks to the naval medical center and the Coast Guard base. There is also an international port as well as shipyards based there with the new Rivers Casino that has just opened in the city.
“The military presence keeps our area pretty stable,” Johnson said.
The report touts the Olde Towne area of downtown, which includes restaurants, wine bars, shops and the Children’s Museum of Virginia, for younger buyers eager to go out.
It did note that many homes date to the 19th century, with some needing plenty of work and others having been restored.
Johnson said there are condominiums, townhouses and some new construction at “a good variety of price points,” and even some $1 million-plus homes along the area’s waterways.
The majority of properties in the city that are for sale are single-family homes.
Though the last few years have been a brutal ride for prospective first-time home buyers as prices, then mortgage rates soared, the analysis found that there are still markets where dreams of settling down without crushing monthly payments is a reality.
“A lot of first time homebuyers who would have had an FHA loan or a VA loan were really left out of the housing market last year because there were so many multiple bids for properties that all cash buyers would would essentially just win out on that property, and that was about a quarter of the market,” Jessica Lautz, National Association of Realtors deputy chief economist and vice president of research, told Nexstar.
More than half of the cities or towns on the list are located in the Northeast. See the top five below:
|4||Gloucester City||New Jersey|
All five cities fell well below the national price-to-income ratio of 5.1, and all of the markets with the exception of Windsor Locks had both a higher 2023 forecasted population of 25-34 year olds and a higher 2022 home inventory ratio than the median. See Realtor.com for the full list.
Tips for a first-time home buyer
If you’re not ready to relocate to Portsmouth, Virginia, there are some things you can do to increase your chances of buying a first home.
Lautz recommends making sure you have expert help in the process.
“A realtor can show you overlooked areas and be able to show you homes that maybe you would have thought were not in in necessarily a place that you were originally looking and widen your scope,” Lautz said. “A good mortgage broker is going to tell you about low down payment programs and programs that you may qualify for and can really help you be able to secure that loan and be able to move forward.”
Despite historically high prices and mortgage rates, competition is still present, but has eased, Lautz said. A seller who might have received five offers a year ago may now only get a couple, but flexibility on the part of the buyer is still a great approach in 2023, according to Lautz.
“For a lot of first-time homebuyers, they may have to make a compromise, and whether that’s location of the home or condition of the home, and, you know, they’re buying a fixer upper or whatever that means, that they may have to look farther out from where they had been looking,” Lautz said.
Lautz also cautions buyers against trying to time the market or mortgage rate fluctuations, and recommends buying whenever the time is right based on one’s own individual situation.
Finally, for prospective buyers who don’t have the luxury of moving in with their parents to save up for a down payment, or taking a loan from the bank of mom and dad, Lautz advises that they look to low down payment options like FHA loans and VA loans.