The Best Real Estate Markets for First-Time Homebuyers in 2023 MABA MassachusettsRealEstate FirstTimeHomeBuyers MassBuyerAgents

The housing market has been brutal for first-time homebuyers. And now, just as prices are finally beginning to slacken and the bidding wars are dying down, higher mortgage interest rates have turned the prospect of homeownership into a financial impossibility for many.

However, there are still places where here first-time buyers might have an easier time becoming homeowners. These are the towns and cities where prices are reasonable, there are more homes to go around, and newbies won’t have to sacrifice their social lives or suffer long commutes.

The Realtor.com® economics team identified these top real estate markets for first-time homebuyers in 2023. More than half are located in the Northeast, mostly in smaller cities that aren’t far from larger urban areas where there are plenty of jobs, things to do on a Saturday night, and lots of nearby outdoor amenities. Some of the top picks are more rural areas that are being built up, while others have struggled in recent years and are coming back up.

Their biggest draw is that all of these places offer more affordable homes for sale, compared with their regions of the country.

“Midsized towns with lots of amenities for young people and more affordable homes are great places for first-time homebuyers, especially in 2023,” says Realtor.com Senior Economist George Ratiu. “They do have local employment markets, which are strong enough to support young professionals getting a start in their careers.”

To come up with the list, the Realtor.com economics team looked at places with at least 5,000 residents in the 100 largest metropolitan areas. Then the team factored in the percentage of 25- to 34-year-olds living there (prime first-time buyer years), average commute times, and unemployment rates in the larger metropolitan area. (Metros include the main city and surrounding towns and smaller urban areas.)

Realtor.com considered the number of homes for sale per 1,000 households and affordability measured by home prices compared with incomes of 25- to 34-year-olds in the 12 months ending November 2022. The economics team also included the number of food and drink establishments per 1,000 households and forecasted sales and price growth in 2023.

So what are the top real estate markets for first-time buyers this year?

1. Portsmouth, VA

Median home list price: $239,000*
Metro: Virginia Beach, VA

The historic seaport city of Portsmouth, which sits across the Elizabeth River from the better-known Norfolk, VA, 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 a new casino opening there this month.

“The military presence keeps our area pretty stable,” says Johnson.

Younger buyers eager to go out can hit up the Olde Towne section of downtown Portsmouth, which offers restaurants, wine bars, shops, and the Children’s Museum of Virginia.

Many homes here date to the 19th century; some need plenty of work, while others have been restored. There are also condos, townhomes, and some new construction at “a good variety of price points,” says Johnson. There are even million-dollar-plus houses along the area’s waterways.

The majority of properties for sale in the city are single-family abodes. This three-bedroom, 2.5-bath Colonial is on the market for just over $300,000—and the seller is offering to help cover closing costs for those who pay full price.

2. DeForest, WI

Median home list price: $389,900
Metro: Madison, WI

Those looking for homes within commuting distance of Madison, about 30 minutes southwest, might want to consider DeForest, a small town on the Yahara River.

The giant, pink elephant sculpture outside of a local gas station is a popular attraction with tourists and locals. The town is also home to Elenbach’s Cheese Chalet, which specializes in Wisconsin-made cheeses, selling more than 400 varieties. And every June, the city hosts its Dragon Art Fair & Silent Auction featuring wares from local artists, live music, and plenty of food.

While there are condos, townhomes, and single-family homes, including this three-bedroom, two-bathroom house on a half-acre for $375,000, most of the listings in the town are for land in newly planned communities. Buyers seeking new construction can find plenty of lots; the typical third of an acre parcel is priced at around $125,000, on the southeastern side of town.

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3. Windsor Locks, CT

Median home list price: $239,900
Metro: Hartford, CT

Unlike the rest of the country, home prices in the Hartford metro area don’t appear to be slowing down. It’s one of the nation’s hottest housing markets and was named the top real estate market for 2023 by Realtor.com. That’s been good for the surrounding suburbs, such as Windsor Locks.

The suburban town, home to the Bradley International Airport and the New England Air Museum, has plenty of large, older, quintessentially New England houses within walking or biking distance of the “cute” downtown, says Amy Chorew, a local Realtor with Better Homes & Gardens Real Estate.

“The Hartford area has quite a few cool towns,” says Chorew. She touted the area’s proximity to New York City and Boston—within two hours in either direction—and the tech companies that have moved into the area.

“There are some really interesting businesses coming into Connecticut,” she adds. “We’re bringing back the young people.”

Many of those moving to the area are coming from Boston and New York City seeking a quieter and more affordable place to raise their families.

Buyers can find older single-family homes spanning between 1,700 and 2,200 square feet on about a quarter-acre lot for between $250,000 and $400,000, according to Chorew. There are also condos and new construction. This newly remodeled, four-bedroom, 2.5-bath Colonial is listed for under $300,000.

4. Gloucester City, NJ

Median home list price: $160,000
Metro: Philadelphia, PA

Settled in 1623, this historic, blue-collar town was recently named the cheapest city in New Jersey. It’s located just across the Delaware River from Philadelphia—and boasts a median list price that’s a fraction of the City of Brotherly Love’s. (The median price in Philly was about $272,000 in the 12 months ending in November 2022.)

The suburban town has seen its share of struggles over the years, but the prices are hard to beat. It was the lowest-priced city on our list.

Gloucester has a mix of single-family homes and townhomes, most of the latter priced below $175,000. This stately, five-bedroom, one-bathroom Colonial with a large backyard is on the market for about $250,000.

5. Moore, OK

Median home list price: $220,000
Metro: Oklahoma City, OK

Just 15 minutes south of Oklahoma City is the suburb of Moore. The former railroad town is known for its parks, aquatic center, and variety of things to do—including its dinner theater, ax throwing club, and trampoline park. Nearly 17% of the local population is between the ages of 25 and 34, according to the Realtor.com analysis.

However, Moore is located in “Tornado Alley” and has been affected by the deadly twisters. A 1999 tornado killed about three dozen people and injured hundreds more. In 2013, another twister devastated the town and claimed the lives of about two dozen individuals.

There were more homes for sale in the city than in many of the others on the list, a mix of new-construction and older, single-family homes. Most of the newly built houses were around $300,000 or so, with larger ones going for more and smaller ones listed for less.

6. Magna, UT

Median home list price: $410,000
Metro: Salt Lake City, UT

Magna has fallen a bit from its perch as the No. 1 destination for first-time homebuyers last year. But it still scored high in our rankings due to its affordability compared with Salt Lake City, just 20 minutes west, and the relatively high number of homes for sale compared with the other places on our list.

The city has undergone a bit of a renaissance in recent years as more first-time homebuyers—as well as older buyers seeking to downsize—have relocated here in search of cheaper homes have moved in. Builders have responded by putting up new communities of townhomes and single-family homes.

“You are close to everything. You’re close to the airport, you’re close to the city, good interstate access,” says real estate broker Joel Carson, of Utah Real Estate in nearby Salt Lake City. He added it’s not far from several large ski resorts.

Most of his buyers are young couples planning for families.

The vast majority of homes for sale in Magna are new construction. Buyers can find yet-to-be-built three-bedroom, 2.5-bathroom homes for around $500,000 or new four-bedroom, 2.5-bathroom townhomes for around $400,000. Those on tighter budgets might want to consider this two-bedroom, two-bathroom mobile home on the market for about $40,000.

7. Eggertsville, NY

Median home list price: $230,800
Metro: Buffalo, NY

Eggertsville is a suburb about 15 minutes northeast of Buffalo, near the Canadian border in way upstate New York. It’s benefited from its proximity to Buffalo, another metro that was named one of the top real estate markets of 2023 by Realtor.com.

Real estate prices are expected to grow by 6% in Eggertsville this year, while sales are anticipated to rise 6.3%, according to Realtor.com analysts. This might not sound like much after the COVID-19 pandemic–fueled real estate frenzy of the Past few years, but the national market has since corrected and prices have begun to hold steady. That makes increases like these notable.

Buyers will find mostly single-family homes in Eggertsville. Those on a budget who don’t mind doing some updating can check out this four-bedroom, two-bathroom home built in the 1940s for about $175,000. Or they can splurge for a 4,500-square-foot, brick home on more than an acre of land with an in-ground, heated pool for roughly $700,000.

8. Watervliet, NY

Median home list price: $228,300
Metro: Albany, NY

Less than a 15-minute drive from New York’s capital of Albany and right across the Hudson River from the city of Troy lies the “Arsenal City,” as Watervliet is known. It earned that nickname for being the site of the Watervliet Arsenal, which manufactured cannons during the War of 1812.

The Hudson River still plays a strong role in the city. The Hudson Shores Park has undergone a revitalization by installing a farmers market, showcasing live music, and holding events like an antiques car show.

The housing stock is mostly made up of single-family and multifamily homes. Buyers seeking some rental income to help with their mortgage can check out this two-family house, which has separate units with three bedrooms and one bathroom in each and a fenced yard. It’s on the market for just over $250,000.

Those who prefer their own abode can check out this three-bedroom, 1.5-bathroom house with a walk-up attic on the market for about $200,000.

9. Mattydale, NY

Median home list price: $128,900
Metro: Syracuse, NY

The small town of Mattydale is a more rural suburb just north of Syracuse near Onondaga Lake. Its claim to fame is having been the one-time home to L. Frank Baum, who wrote “The Wonderful Wizard of Oz.” A middle school now sits on the site of his former home.

The town has the usual amenities that homebuyers want, including a movie theater, restaurants, and bars. As a bonus, it’s right near the Syracuse Hancock International Airport.

Most of the homes for sale in Mattyvale are smaller, single-family homes priced below $150,000. This cute three-bedroom, 1.5-bath home spanning about 1,600 square feet is on the market for $145,000.

10. Somersworth, NH

Median home list price: $329,900
Metro: Boston, MA

Somersworth, about a half-hour northwest of Portsmouth, NH, and about two hours north of Boston, has taken off in recent years. The area is home to an old Air Force base that was converted into the Pease Tradeport Portsmouth, an industrial and commercial space that serves as a research hub providing lots of good local jobs.

But unlike many other nearby communities, Somersworth, which is still a bit rough around the edges, remains relatively affordable for the region.

“Somersworth is benefiting from all boats rising,” says real estate agent Maria Shute, of Re/Max On the Move. Many of her buyers are coming from Boston, especially recent college graduates who want to remain in the area. “The sea coast of New Hampshire is extremely desirable.”

The real estate market isn’t as heated as it was over the past few years, but it hasn’t stalled either, she says. “The multiple offers won’t be 25. You might have three.”

There are currently mostly smaller, single-family and mobile homes for sale in the city. Buyers can pick up a brand-new, two-bedroom, two-bathroom manufactured home with a deck for under $175,000. Or they can splurge on a 3,500-square-foot house on more than 5 acres in the more rural part of Somersworth for $915,000.

* Prices are 12-month averages ending in November using Realtor.com listing data.

The post The 10 Best Real Estate Markets for First-Time Homebuyers in 2023 appeared first on Real Estate News & Insights | realtor.com®.

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