Using Zillow data to identify high-yield markets

[Mark Timmerman]

Hey all, I wanted to share a method I used to find high yield neighborhoods in the U.S., using data that Zillow freely provides.

I'll share the results at the end, and first I'll outline the method. Zillow provides data at a few resolutions (e.g. State, Metro, County, City, Neighborhood). I used Neighborhood because it's the most precise and really let's you drill into a specific area.

1. 1. Download Zillow's Home Value Data: Median Home Value
2. 2. Download Zillow's Median Rent Data: Median Rent
3. 3. Use the Region ID field to match a neighborhood's median home value to its median rent
4. 4. Calculate gross yield: (median rent * 12) / median home value
5. 5. (optional) Filter list to a certain price range. I filtered to online include median home values between $100,000 and $165,000
6. 6. Sort list by gross yield (descending)

I wrote a quick javascript program to organize the data, perform the calculation, and to filter, sort, and display the data. Any language will work, as will an Excel spreadsheet (but the amount of data might overwhelm your computer on Excel). It's amazing how powerful a tool technology can be.

Here is a summary of the top results (I generated the links with the script so that they link to homes for sale on Zillow in that neighborhood):

Region - City - State - Median Price - Median Rent - Gross Yield - Link

Newhallville - New Haven - CT - $100,600 - $1,494 - 17.82% - Current Listings

Cadwalader & Hillcrest - Trenton - NJ - $107,200 - $1,498 - 16.77% - Current Listings

Downtown - Trenton - NJ - $109,200 - $1,490 - 16.37% - Current Listings

Lauderdale Manors - Fort Lauderdale - FL - $109,100 - $1,469 - 16.16% - Current Listings

Cedonia - Baltimore - MD - $107,300 - $1,436 - 16.06% - Current Listings

Rock Island - Fort Lauderdale - FL - $115,000 - $1,533 - 16% - Current Listings

Bayou Oaks - Sarasota - FL - $103,800 - $1,340 - 15.49% - Current Listings

East Arlington - Baltimore - MD - $104,300 - $1,342 - 15.44% - Current Listings

Fair Haven - New Haven - CT - $116,500 - $1,485 - 15.3% - Current Listings

Though the formatting doesn't look so great, the data shows some pretty cool stuff! This only analyzes single family residences, but it's a great example of what you can do with the data available. Reach out if you'd like help setting up your own program, or want to talk about more data sources to explore.

Cheers,

Mark