First-time homebuyers seeking an affordable starter home often find the real estate market intimidating. But it doesn't have to be, and with a bit of help, you can easily navigate real estate markets big and small to understand how much home you can afford for your first purchase.
In this article, we'll examine ten bustling metropolises – Sarasota and Orlando in sunny Florida, San Antonio and Houston in the Lone Star State, the eco-conscious city of Portland in Oregon, Tacoma in picturesque Washington, the desert oasis of Phoenix in Arizona, the mile-high city of Denver in Colorado, charming Salt Lake City in Utah, and Minneapolis in the Land of 10,000 Lakes – to provide a comprehensive overview of what a starter home costs.
Below we examine these cities' housing markets, home price drivers and how much you can expect to pay per bedroom.
Join us as we discover how to select the right starter house for your budget and lifestyle. We hope to simplify your homebuying process in these major cities and help you make a more informed decision.
What is a Starter Home?
A starter home is often a modest, reasonably priced, compact residence for first-time homebuyers. These homes act as an initial stepping stone for individuals or couples venturing into the real estate market, offering a viable and cost-effective option for those shifting from
renting to owning.
The
starter home concept is based on the assumption that as a person's financial standing improves and their family grows, they might move into a large, more expensive property.
The primary features of a starter home include affordability, size and simplicity. Starter homes are typically smaller, with fewer rooms and amenities than
move-up homes. These homes are often listed at a price lower than the median home price in a specific area, making them more accessible to those just starting to establish their financial foundation. The smaller layout allows for reduced maintenance costs and less upkeep, which can benefit first-time homeowners unfamiliar with the responsibilities of owning a home.
Location is another crucial aspect of a starter home. Selecting a location with potential for growth and development can enhance the home's value over time, enabling
homeowners to accumulate equity. Starter homes can often be found in emerging neighborhoods or suburbs that balance proximity to urban centers and affordability.
Why Do Buyers Seek Out Starter Homes?
There are numerous advantages to a starter home, including the following:
-
These properties allow first-time homebuyers to acquire valuable skills and knowledge about homeownership without overwhelming them with financial strain or maintenance duties.
- Starter homes enable individuals and couples to build equity and establish a credit history, which can be advantageous in obtaining more favorable mortgage rates and terms in the future.
- Owning a starter home can impart a sense of stability and autonomy that may not always be achievable when renting.
How Much is a Starter Home in Sarasota, Florida?
The
Sarasota, Florida, real estate market has witnessed notable fluctuations over the past year. In February 2023, the median sold price of homes increased by 1.1 percent to $506,675 compared to the previous year, with a cost per square foot of $386. The price changes were more noticeable in specific categories based on the number of bedrooms.
In Sarasota, Florida, the median sold price for homes with one bedroom increased by 4.6 percent from February 2022 to February 2023, reaching $366,100. Homes with two bedrooms saw an increase of 2.9 percent, with the median sold price reaching $435,100.
The highest percentage increase in median sold prices was in three-bedroom homes, which rose 8 percent to $612,000. However, the median sold price for homes with four bedrooms decreased significantly by 32.8 percent during the same period, dropping from $1.4 million to $1.0 million.
Finally, homes with five or more bedrooms had a modest increase of 2.6 percent, with the median sold price remaining at $2.9 million in February 2022 and February 2023. These figures indicate that the Sarasota real estate market saw a mixed trend in median sold prices by bedroom count over the past year.
Compared to nearby cities, Longboat Key experienced substantial increases in median sold prices. The number of available homes in Sarasota rose 29.1 percent from January to February 2023, with 1,911 properties on the market.
Home sales surged by 254.3 percent, with 333 homes sold in February 2023. Most of these homes (71 percent) were sold below the asking price, indicating potential good deals for buyers.
However, the Sarasota market is competitive, and buyers should be ready to act swiftly. The average sale time increased by 46.9 percent to 42 days, and 56 percent of homes sold in under 30 days.
In summary, the Sarasota housing market has experienced growth in median sold prices, increased inventory and a surge in home sales. Buyers should be prepared to move quickly to secure their desired property in this dynamic market.
How Much is a Starter Home in Orlando, Florida?
The Orlando housing market in Orange County, Florida, has been market-friendly to sellers since last year, with higher prices and faster home sales. The median sold price for homes in the area has risen by 11.6 percent to $329,878, with a cost per square foot of $228 based on all homes sold in the last 12 months.
The median sold price has increased across all bedroom categories. One-bedroom homes saw a 24.2 percent increase to $158,000, two-bedroom homes rose by 25.1 percent to $224,900, three-bedroom dwellings increased by 8.8 percent to $368,000, four-bedroom homes climbed 13.9 percent to $550,600 and homes with five or more bedrooms experienced a 9.7 percent increase to $798,300.
Orlando saw an 11.6 percent increase in median sold prices compared to nearby cities, consistent with the trends observed in surrounding areas.
The number of available
homes in Orlando rose 21.5 percent between January and February 2023, totaling 2,736 properties. This increase was evident across all bedroom categories, with the most significant jump of 27.6 percent seen in four-bedroom homes. Home sales spiked by 202 percent from January to February 2023, with 619 homes sold.
In February 2023, 63 percent of homes were sold below the asking price, presenting potential good deals for buyers. However, buyers should be prepared to act fast, as the average sale time increased by 77.7 percent to 50 days and many homes sold in less than 30 days.
In summary, the Orlando housing market favors sellers with higher prices and faster sales. Buyers may find good deals but should be ready to act quickly in this competitive market.
How Much is a Starter Home in San Antonio, Texas?
In Bexar County, Texas, the San Antonio housing market has evolved from a seller's market in the previous year to a more balanced, neutral market. This change indicates that home pricing has become more moderate, and properties typically stay on the market for an average time.
During the last 12 months, San Antonio experienced a 10.3 percent rise in median sold prices, reaching $280,178 with a rate of $166 per square foot. This upward trend in median sold prices is evident across all types of homes, based on bedroom count.
One-bedroom homes saw a 16.1 percent increase to $127,700, two-bedroom homes grew by 10.4 percent to $184,900, three-bedroom dwellings rose by 11.8 percent to $264,900, four-bedroom homes saw a 9.5 percent growth to $340,000, and homes with five or more bedrooms escalated by 16 percent to $463,700.
San Antonio's 10.3 percent median sold price increase matches neighboring cities. San Antonio has 6,013 properties for sale, up 14.1 percent from January 2023.
Last month, 59.1 percent of
San Antonio homes sold below the asking price; the area's average listing time is 64 days.
How Much is a Starter Home in Houston, Texas?
In Harris County, Texas, Houston's housing market has remained a seller's market since the previous year. This data indicates that property prices are inclined to be higher, and homes typically sell faster.
Over the last 12 months, there has been a 2.3 percent increase in the median sold price for Houston homes, reaching a value of $332,317 and an average rate of $174 per square foot.
Different bedroom counts increase median sold prices differently. One-bedroom homes rose 12 percent to $145,900, while two-bedroom homes fell 3.9 percent to $216,100. Three-bedroom homes grew 2.3 percent to $342,400, four-bedroom homes jumped 4.9 percent to $409,400 and five-bedroom homes rose 6.3 percent to $712,000.
Houston's median sold prices rose 2.3 percent, following regional trends. Houston has 8,821 properties for sale, up 21.4 percent from January 2023.
For those looking to buy a
home in Houston, there's a fair opportunity to land a favorable deal, as 64.2 percent of properties sold in the previous month sold below the asking price. Since many homes in the region sell rapidly, potential buyers should be ready to make swift decisions. The average listing duration has risen by 10.8 percent to 47 days.
How Much is a Starter Home in Portland, Oregon?
In the past year, Portland's housing market has shifted from a seller's market to a market more suited to buyers. This change lowers property prices and increases market time. Portland's median sale price is up 3.8 percent to $534,993, with the average cost per square foot of $323.
Median sale prices rose across bedroom categories. One-bedroom homes stayed at $320,000, while two-bedrooms rose 1.2 percent to $434,900.
Portland's three-bedroom houses for sale grew 4.1 percent to $535,900, four-bedroom properties went up 4.1 percent to $706,300 and five-bedrooms saw the most significant rise of 4.2 percent to $850,000.
Contrasting Portland with nearby cities unveils a 3.8 percent expansion in median sale prices. As of February 2023, Portland had 4,872 homes listed for sale, indicating a 5.5 percent increase from January 2023.
Homebuyers on the lookout in Portland have promising chances of securing an attractive deal since 45.4 percent of homes sold in the previous month went below their listed prices. However, potential buyers should be ready to act promptly, as numerous properties are selling quickly, with the average sale duration soaring by 98.6 percent to 54 days.
How Much is a Starter Home in Tacoma, Washington?
The housing market in Tacoma, situated in Pierce County, Washington, continues to be a seller's market, as it was in February 2022. The data suggests that property prices are generally higher, and homes sell faster.
The median sold price of homes in Tacoma has risen by 6.4 percent over the past year, reaching $475,000, with an average price per square foot of $329.
An examination of median sold prices in Tacoma reveals growth across all categories based on the number of bedrooms. One-bedroom homes experienced an 8.9 percent increase to $333,200, while two-bedroom homes jumped by 11.1 percent to $410,000. Three-bedroom
homes in Tacoma rose by 3.3 percent to $460,200, four-bedroom dwellings increased by 5.9 percent to $540,000 and homes with five or more bedrooms saw a 7.5 percent growth to $645,000.
Tacoma's median sold prices are 6.4 percent more than adjacent cities. Tacoma had 694 houses for sale in February 2023, up 14.3 percent from January.
Sellers benefit from Tacoma's higher home prices and speedier sales. Tacoma sold 179 properties in February 2023, up 32.6 percent from January. 35.2 percent of properties sold last month were below their asking price, giving buyers an excellent opportunity for a deal.
Tacoma's competitive market requires buyers to act swiftly or risk missing out.
How Much is a Starter Home in Phoenix, Arizona?
Phoenix, Arizona, continues to be a seller's market, with rising home prices and quicker sales times. In the past year, the median selling price reached $438,017 or $281 per square foot, an 11.1 percent increase since February 2022.
Analyzing median sold prices by bedroom count reveals growth across all categories. One-bedroom homes increased by 16.3 percent to $250,000, while two-bedroom homes jumped 14.6 percent to $332,300. Three-bedroom homes rose 10.4 percent to $429,900, four-bedroom homes surged 12.1 percent to $536,400 and five or more-bedroom homes climbed 9.7 percent to $740,000.
February 2023 saw 5,792 properties for sale, up 7.0 percent from January. February 2023 saw 1,193 properties sold, up 23.8 percent from January. Sixty-six percent of Phoenix houses sold last month were below the asking price, offering buyers terrific offers.
The average sale time has increased substantially despite Phoenix being a seller's market. Homes took 79 days to sell in February 2023, a 147.6 percent increase from the previous year, allowing buyers to negotiate and secure favorable deals in this competitive market.
How Much is a Starter Home in Denver, Colorado?
Denver's housing scene remains a seller's market, with homes selling faster and at higher prices. The median price for homes sold in the city has risen to $629,637 or $412 per square foot, marking a 14.3 percent increase since February 2022.
There's been growth in all categories of median sold prices by bedroom count. One-bedroom homes saw a 3.2 percent increase, reaching $335,000, while two-bedroom homes rose 10.7 percent to $490,000. Three-bedroom homes climbed 9.9 percent to $679,300 and four-bedroom homes jumped 16.1 percent to $857,400. Homes with five or more bedrooms surged 23.2 percent to $1.1 million.
Denver's 3,312 properties for sale increased by 19.7 percent in February 2023. February had 838 home sales, up 30.9 percent.
Despite Denver's seller's market, 47.9 percent of houses sold below their asking price last month, providing buyers a chance to save. Fifty-five percent of homes sell in 30 days, but the average sale time has grown to 47 days, up 115.7 percent from last year.
In
Denver's fast-moving real estate market, buyers must act swiftly and capture chances before it's too late.
How Much is a Starter Home in Salt Lake City, Utah?
The Salt Lake City housing market experienced a dip in median list prices in February 2023 while the inventory of available homes increased. The median list price for all homes was $568,250, or $315 per sqft, marking a 1.2 percent decrease from January 2023.
Examining homes by bedroom count, one-bedroom properties saw a 2.4 percent rise to $344,900. In comparison, two-bedroom homes experienced a 2.0 percent drop to $422,400. Median prices for three- and four-bedroom homes remained steady at $474,900 and $664,900, respectively. Homes with five or more bedrooms had a 0.8 percent decrease to $877,400.
Salt Lake City's median list prices declined compared to neighboring cities, while West Valley City's increased by 1.1 percent. Meanwhile, Magna, North Salt Lake and South Salt Lake experienced price drops.
Available homes for sale in Salt Lake City surged by 48.9 percent in February, totaling 682 listings. This increase affected all bedroom categories, with one- to five-bedroom homes experiencing significant growth in listings. Additionally, the average listing age dipped by 4.1 percent, with homes spending an average of 73 days on the market in February 2023.
How Much is a Starter Home in Minneapolis, Minnesota?
Minneapolis, Hennepin County, Minnesota, remains a seller's market with higher prices and faster sales. The median sales price of homes rose 2.3 percent to $324,194 or $224 per sqft last year.
Median sold prices vary by bedroom count. One-bedroom homes fell 2.1 percent, while two-bedroom homes rose 1.8 percent. Three-bedroom homes rose 3.3 percent and four-bedroom homes 0.8 percent. Five-bedroom homes fell 7.4 percent.
Compared to neighboring cities, Minneapolis experienced less growth in median sold prices. Meanwhile, the number of available homes in Minneapolis surged by 28.6 percent from January to February 2023, with all bedroom categories witnessing a considerable increase in listings. Home sales also jumped by an impressive 113 percent during this period.
For potential homebuyers, Minneapolis offers opportunities to strike a good deal, as nearly half of the homes sold in February 2023 were below the asking price. However, with the average sale time rising by 15.8 percent to 49 days, buyers should be prepared to act swiftly, as many properties are selling quickly.
Conclusion
To conclude, first-time homeownership is exciting, but it can be scary. Evaluate home prices in the city you want to live in using multiple factors, including the changing real estate market. We examined Sarasota, Orlando, San Antonio, Houston, Portland, Tacoma, Phoenix, Denver, Salt Lake City and Minneapolis housing markets to help you identify affordable homes based on bedroom count.
If you need further assistance, LGI Homes has resources and homebuying experts to help. We have new homes ready for
immediate move-in in many markets mentioned above with state-of-the-art designs, different bedroom counts for various family sizes, and at comparable or better prices than nearby median resale houses. Plus, every home we build includes designer upgrades at no additional cost for homebuyers.
Contact an LGI Homes representative today to explore new home options in your desired city.
