“Starter home“: a relatively small, economical house or condominium that meets the requirements of young people buying their first home.
While there’s no precise definition, I have two associations with “starter home”:
One. Price Point.
Starter homes are (well) below the average price for homes in the local market — whatever that may be.
So, a starter home in San Francisco may be $800k, while one in Omaha might be $150k (note: “entry-level” and “affordable” are NOT necessarily the same thing).
I think of starter homes having two Bedrooms or three very small ones, that may (or may not) be in rough condition.
That translates into something like 1,200 – 1,500 finished square feet.
Due to their relatively small size, starter homes are frequently marketed as “cute,” “cozy,” and “adorable.”
Traditionally, they appealed to first-time Buyers, who stayed there just long enough to build some equity and score a job raise (or two), then moved up to a larger, “family” home (also known as the “permanent” or “forever” home).
Short Tenure? Maybe Not
Of course, in a continued Seller’s market with scarce inventory, there are plenty of homeowners whose “temporary” starter home turned out to be anything but.
At the other extreme, starter homes increasingly appeal to many aging-in-place Baby Boomers, who are now downsizing retirees.
Especially attractive: ramblers that offer one-level living.