Worcester is One of the Worst Cities for First Time Home Buyers

Tuesday, July 19, 2016

GoLocalWorcester Business Team

If you are looking to make take the leap and leave the world of renting or move out of your parents basement, Worcester is a tough city.

New data released on Monday ranks Worcester as the 180th best city for first time homebuyers.

The city ranks 169th for affordability, the Worcester real estate market ranks 254th, and the city ranks 94th for quality of life.

Trend Against Home Ownership

Home ownership has dropped dramatically since the 2008 recession.

“In 2015, the National Association of Realtors® reported that among buyers of primary residences, 32 percent were first-timers, whereas the historical average has been 40 percent for this group,” according to WalletHub.

The trend is not expected to reverse, a “recent Gallup poll, found 38 percent of non-homeowners in 2016 don’t plan to buy a home in the foreseeable future, compared with 31 percent three years ago.”

WalletHub’s analysts compared 300 cities of varying sizes across 19 key metrics. Our data set ranges from housing affordability to real-estate taxes to property-crime rates. Continue reading below for our findings, expert commentary and a full description of our methodology.

Source: WalletHub

Methodology

To determine the most favorable housing markets for first-time home buyers, WalletHub’s analysts compared 300 U.S. cities of varying sizes across three key dimensions: 1) Affordability, 2) Real-Estate Market and 3) Quality of Life.

We evaluated these dimensions using 19 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a scale of 0 to 100, with 100 representing the most favorable conditions for first-time home buyers.

We then calculated overall scores for each city using the weighted average across all metrics, which we then used to construct our overall rankings.

With regard to our sample, please note that “city” refers to city proper and excludes surrounding metro areas. Data for the metrics marked with an asterisk (*) were available only at the state level.

For this particular study, we categorized the cities based on the following population sizes:

Large cities: More than 300,000 people
Midsize cities: 150,000 to 300,000 people
Small cities: Fewer than 150,000 people

Affordability – Total Points: 33.33

Housing Affordability: Triple Weight (~14.29 Points)
Note: This metric was calculated by dividing the median annual household income by the median house price.
Average Cost of Homeowner’s Insurance: Full* Weight (~4.76 Points)
Cost of Living: Full Weight (~4.76 Points)
Cost per Square Foot: Full Weight (~4.76 Points)
Note: This metric measures specifically the median sale price per average home square footage.
Real-Estate Tax Rate: Full Weight (~4.76 Points)

Real-Estate Market – Total Points: 33.33

Rent-to-Price-Ratio: Double Weight (~9.52 Points)
Housing-Market Health Index: Full Weight (~4.76 Points)
Percentage of Homes Sold in One Year: Full Weight (~4.76 Points)
Median Home-Price Appreciation: Double Weight (~9.52 Points)
Foreclosure Rate: Full Weight (~4.76 Points)

Quality of Life – Total Points: 33.33

WalletHub “Recreation” Ranking: Full Weight (~3.33 Points)
WalletHub “Recession Recovery” Ranking: Full Weight (~3.33 Points)
WalletHub “Weather” Ranking: Full Weight (~3.33 Points)
WalletHub “School Systems” Ranking: Double Weight (~6.67 Points)
WalletHub “Driver-Friendliness” Ranking: Full Weight (~3.33 Points)
WalletHub “Jobs Availability” Ranking: Full Weight (~3.33 Points)
Total Home-Energy Cost: Full Weight (~3.33 Points)
Violent-Crime Rate: Full Weight (~3.33 Points)
Property-Crime Rate: Full Weight (~3.33 Points)

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Worcester is One of the Worst Cities for First Time Home Buyers

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