No single factor coaxes a buyer into plunking down earnest money for a home, but how do you determine what makes the best set of factors to entice your particular buyer? Perhaps it’s getting them to purchase the least expensive home on a great block.
Real estate company Redfin has been delving into just those data sets.
Some affordable homes are in city neighborhoods near highly rated schools and within walking distance to everyday amenities. But finding them can take some detective work.
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Refin researchers recommend searching in neighborhoods that have a plethora of homes at higher price points, too.
But before dismissing that strategy, consider what crunching a variety of variables has shown Redfin: neighborhoods with a mix of home prices are three times more likely to be walkable and have highly rated schools than are purely affordable neighborhoods.
If you are looking for an affordable home, your instinct might be to search in only affordable neighborhoods. And, if that’s all you are looking for, that’s great. But homebuyers are not a one-dimensional bunch.
So then, here’s the nugget: to find an affordable home with a combination of highly rated schools and a high Walk Score, look for the least-expensive home in a mixed-priced neighborhood from this list.
Now, even the folks at Redfin admit that this is a tall order, finding that areas with a balanced mix of home prices cover just 13 percent of major U.S. cities.
To provide the rankings, Redfin looked at Walk Score and GreatSchools rankings for 20 cities that they serve.
They examined 170 balanced-mix and affordable neighborhoods by their Walk Scores and GreatSchools school ratings. Only 24 out of that bunch did well with schooling and walking.
The good news for D.C. home shoppers is that three popular neighborhoods were found to have a balanced mix of home prices, and concurrently did well as neighborhoods with good schools and high walkability. All three were listed in the top 10.
Those three (with their WalkScore and GreatSchools rankings) are:
| 2 | West End, Washington, DC | 95 | 6.5 |
| 3 | Adams Morgan / Kalorama Heights / Lanier Heights, Washington, DC | 94 | 6.5 |
| 8 | Columbia Heights, Washington, DC | 93 | 5.5 |
Redfin used home sale price data from July 2013 through June 2015.
A home was considered affordable if 28 percent of the local median family income could cover the monthly mortgage and principal payment, assuming the buyer put 20 percent down and took out a 30-year loan with a 4 percent interest rate. Homes with sale prices 20 percent above that were tagged as expensive.
Price mix involved more counting. The Redfin team used grids to compare groups of homes in a neighborhood to find price comparisons. Affordable areas had at least three affordable homes for every expensive home.
Areas with a balanced mix of home prices had a ratio of affordable to expensive homes between 0.33 and 3.0. High-end areas had at least three expensive homes for every affordable home.
A Walk Score of 60 or higher was considered walkable. An above average GreatSchools score meant 5 or above in that group’s methodology.
