The number of homes for sale nationwide has been falling for more than two straight years, and home prices in the hottest markets have risen by double digits in as much time. This has created a conundrum for homebuyers seeking a neighborhood that “has it all”– affordable homes for sale, highly rated schools and an easy commute.
Redfin analysts found just 25 neighborhoods that fit the bill across 80 major U.S. markets. More than half of the neighborhoods on the list are in the Chicago area, the rare major metro area that has remained relatively affordable and has largely bucked the severe inventory shortage trend seen across much of the country over the past few years. Neighborhoods in Pittsburgh, Cleveland, San Antonio, Dallas, Houston and Miami also made the list. These are places to watch in 2018, when we expect last year’s trend in migration from expensive, high-tax coastal markets like San Francisco, Silicon Valley and New York toward smaller, more affordable cities, to intensify.
We identified the neighborhoods using the following criteria:
|Rank||Zip Code||Neighborhood in Zip Code (City)||Median Sale Price||# of Homes For Sale (As of December 2017)||Median Days on Market||School Ranking||Transit Score||Crime Rate (lower the better)|
|1||60634||Dunning(Chicago, IL)||$ 256,000||263||76||6.6||55.4||35|
|2||60652||Ashburn(Chicago, IL)||$ 175,000||135||63.5||5.6||55.5||38|
|3||15217||Squirrel Hill (Pittsburgh, PA)||$ 272,500||117||72||5||50.4||28|
|4||60630||Jefferson Park (Chicago, IL)||$ 275,000||170||60||8||63.8||36|
|5||60707||Elmwood Park (Chicago, IL)||$ 250,000||164||62||5||54.1||38|
|6||60302||Oak Park (Oak Park, IL)||$ 278,000||167||69||9.4||59.9||38|
|7||60613||Wrigleyville (Chicago, IL)||$ 269,000||266||55||7.8||78.6||40|
|8||60645||West Ridge(Chicago, IL)||$ 189,000||148||69||8||57.7||44|
|9||60659||North Park (Chicago, IL)||$ 226,500||89||81||8.8||53.8||44|
|10||60202||Evanston (Evanston, IL)||$ 272,000||111||65||7.5||51.7||40|
|11||60660||Edgewater (Chicago, IL)||$ 203,750||144||63.5||6.667||70.7||49|
|12||61801||Campustown (Urbana, IL)||$ 122,100||100||80||5||55.8||56|
|13||77022||Independence Heights (Houston, TX)||$ 137,000||45||69||5.667||50.5||61|
|14||60640||Andersonville (Chicago, IL)||$ 243,000||244||62||5.5||75.8||53|
|15||60625||Lincoln Square (Chicago, IL)||$ 285,000||170||61||6.889||62.2||48|
|16||44120||Shaker Heights (Shaker Heights, OH)||$ 115,560||171||108.5||7.25||51.9||71|
|17||33162||North Miami Beach (North Miami Beach, FL)||$ 220,000||153||59||6||50.9||59|
|18||60641||Belmont Gardens (Chicago, IL)||$ 275,000||160||59||5||62.4||49|
|19||78229||Lafayette Place (San Antonio, TX)||$ 142,500||59||52||5.5||51.2||75|
|20||44106||University Circle (Cleveland Heights, OH)||$ 165,000||71||77||7||55.1||77|
|21||75203||Cadillac Heights (Dallas, TX)||$ 205,000||11||538||6.333||52.8||80|
|22||40507||Speigle Heights(Lexington, KY)||$ 277,500||9||171||5||55.8||69|
|23||76102||Fort Worth(Fort Worth, TX)||$ 259,950||27||59||5||50.0||84|
|24||35203||Central City (Birmingham, AL)||$ 270,000||32||66||8||54.7||87|
|25||45202||Mount Adams (Cincinnati, OH)||$ 291,000||184||82||5||70.8||83|
The new tax bill, which caps state and local tax (SALT) deductions at $10,000, compounds affordability concerns, particularly in the high-tax state of Illinois, home to 14 of the 25 highlighted neighborhoods. Redfin agent Alex Haried in Chicago, says taxes should always be considered when analyzing affordability.
“Our general rule of thumb in Chicago is to set aside about 2 percent of the sale price for local taxes each year,” he said. “These are the same taxes that help the city maintain a world-class transit system and help our schools rank highly, so it’s a necessary evil and a big reason why so many Chicago zip codes made the cut.”
Another theme for areas that ranked highly was access to job centers, which is the case for Squirrel Hill in Pittsburgh.
“Relocators have really taken kindly to Squirrel Hill not only because of the affordability, but also the commute,” said Redfin Pittsburgh agent Jennifer Sowers. “Google, Uber and Carnegie Mellon University are large employers in the area and a short commute away via public transit.”
Methodology: The analysis rated zip codes across 80 markets according to median sale price and median days on market in November according to the Redfin Real-Time Housing Market Tracker, as well as Transit Score from Walk Score® and school ratings from GreatSchools. The final ranking was determined by ranking zip codes according to each criteria described above, along with crime rates from the “violent crime scale” on BestPlaces.net, and then taking the average of all those rankings to rank order the top 25 zip codes. Local Redfin agents assisted in identifying the neighborhood name that most closely matched each zip code.
*$291,700 was the national median sale price in November 2017
**46 was the national median days on market in November 2017
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