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I would say a max square footage in the 1200-1400 area. I consider small 3 bedrooms a starter home.
Price is relative. Where I live, it could change drastically in just a mile or two. For the most part, below the average price in that town. For most of the country, a starter home will be somewhere in the 100,000s.
for me, it was a condo. It was about 1000 sq ft, 2 bed, 2 bath so a nice amount of space, but of course much less expensive than a single family that size would have been. I've moved up the property ladder a couple of times since then, but I never could have afforded what I have now if I hadn't had the nice down payment I got from selling my previous home, and ditto that statement when it came to buying that one.
So to me, it's whatever gets you into the market for where you want to live for the price you can afford. It's also that it's purchased with the idea that it is your entry into home ownership, and not as the home you necessary expect to live in forever.
Starter homes seem to be varied now, especially with many waiting to get into the housing market. My starter home was a 4BR/ 2BA home with ~1700 sq. ft. I waited to buy well into my 30s.
a) Below the median house price for that area
b) Not as nice as their parents' houses.
I agree with this definition. A starter home in my area is probably a 3 bedroom/2 bath home that is 1500-2000 sq feet. The same home in a HCOLA might be considered a move-up house.
For me, "starter home" means a house priced in the lower end of the local market which may or may not need a lot of fixing up. I think for a true starter home it should have as few maintenance issues as possible at the beginning of ownership, maybe just small things to ease in the buyers into home ownership, but the cosmetics would probably be out of date by at least a decade if not more. However, sometimes in incredibly high COL areas, low-maintenance may not be possible (although the cosmetics might be a given).
As far as size goes, I think that's really dependent on where the buyer is in their life. Are they single? A childless couple? A couple with one/two/three children? Sometimes it takes a while for lower-income people to save up down payments and closing costs, meaning they might have more kids than a 2 bd 1 ba would comfortably fit.
I think "starter home" depends on your goals, location, and income. If you play your cards right, it might end up being a very beneficial move. I knew of a couple who bought a house for much less than what they could really afford. They doubled up on payments until it was paid off. I think they took a fifteen year mortgage and paid it off in seven years. They spent another couple of years saving the money that would have been payments. They sold at a higher price than they purchased it, it was paid off, and they had the few years of saved money. They then went out and bought another house they planned to stay in and had a very low mortgage payment. I think it's very important not to overdue it with a first home. Always think how good resale value might be and how long you need to be there to turn a profit, build equity, or get a pay raises.
People shouldn't buy starter homes. If they don't think it can be their forever home, just rent
Anyway, the very bottom of the market here is $300,000. That's for either a nice 2br condo or a not-nice very small house
Where I live, rents are higher than mortgages for comparable properties. So renting costs more and gets you no equity. If you don't buy a starter home, chances are you will never be able to get into the market. Most people move around anyway, for all kinds of reasons, not many people end up staying forever in the very first home they buy.
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