There are plenty of hot and trendy neighborhoods in California but which ones are the most stable and affordable housing markets?
According to a new report from financial technology company SmartAsset, three of the top five healthiest neighborhoods in the state are in the East Bay: Castro Valley, in Alameda County, is No. 1 on the list; Benicia, in Solano County, ranks at No. 3; and Pleasant Hill, in Contra Costa County, ranks at No. 5. The rest of the top 10 markets are in Southern California.
SmartAsset focused on four major aspects of a market: stability, risk, ease of sale, and affordability.
Here is the description of what SmartAsset considers a healthy market: “A healthy housing market is both stable and affordable; homeowners in a healthy market should be able to easily sell their homes, with a low risk of losing money over the long run. So, in order to find the healthiest housing markets in the country, we considered the following four factors: stability, affordability, fluidity and risk of loss.”
SmartAsset also shares how they came to these conclusions, “We measured stability with two equally weighted indicators: the number of years people remain in their homes and the percentage of homeowners with negative equity (as homeowners with negative equity are more likely to go into foreclosure). To account for our second factor, risk, we used the percentage of homes that decreased in value. To determine housing market fluidity, we looked at data on the average time a for-sale home in each area spends on the market—the longer it takes to sell, the less fluid the market. Finally, we calculated affordability as the monthly cost of owning a home as a percentage of household income in each county and city.”