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Everyone's idea of a starter home is different however!
We built our starter home. It was in the Chicagoland suburbs, 2,000 sq ft for $268k. Now to most, that probably wouldn't be considered a starter home, but to us it was. We moved 3 years later and built a 3,400 sq ft home for almost double the first homes price.
So IMHO a starter home doesn't necessarily need to be cheap and small, it's what one can afford at the time for their first home with the outlook that one will not live in it forever.
Starter homes are not being built because some towns and cities won't allow a house under a certain size. Also it costs a lot of money to build a home. If you have to put in a kitchen and a bathroom or two it doesn't cost a lot more to build and extra bedroom or make a living room larger. They then can increase the price and their profits.
I'm probably an oddball regarding this but I'd much rather buy that house than pay $700 a month for an apartment. To my eyes, that's a nice house almost move-in ready. It looks well maintained, has a nice fenced yard, clean basement, storage building. I'm not sure what more I would want. Why would I want to rent an apartment with people on all sides of me, no yard when I could live in a house like this for not much more money? Sure there's going to be some maintenance but you also get a tax break and build equity. Remodeling a home like this isn't necessary, it's optional if you want to do it.
Is it habitable? Absolutely. Is it nice by modern standards? No. It's very dated.
The carpet is dated and probably in poor condition. No one wants paneling these days. The kitchen is extremely dated. The atomic age pink bathroom isn't appealing.
The price was cut by at least $20,000, it's been on the market for six months, and still isn't moving at $115,000. What if you need to sell down the line? There's no way you could get anything out of it close to what you'd put in by remodeling plus the initial price. The property isn't going to appreciate - the only equity you're going to get is paying down the principle.
I'll admit this is true since we bought a 1300sf starter house in move-in condition for $330k back around 2000. Now that same house is estimated at $420k. Even with cost-of-living / salary adjustments, who's going to spend that much on a small starter? I filtered by < $350k and there are certainly fewer available than back then. Maybe because of the current prices, people stay in their starters longer too.
Many people are doing what I’ve done recently, snatching up those houses cheap after foreclosure and turning them into rentals.
Most of the smaller houses like that in my area were built in the 1960’s, so it is true that the plumbing and electrical is getting to that age where it needs replacing. I just had to have work done to corroded cast iron drain pipes on one I just bought, and the plumber said he’s been working on a lot of those lately.
Nothing personal, but people who are doing what you are doing are part of the problem.
There are no starter homes, and rents are sky-high due to the lack of affordable homes.
We have the same problem where I live. During the crash a few years ago investors came in and bought many of the foreclosed or short sale properties. Then they put a little bit of work into them (or sometimes none at all), rented them for a few years and then when the market improved sold them at a huge profit. Also in my area it is hard to find a starter home due to investors snapping them up with cash before anybody else who needs a mortgage can do so. Rumors around here were that investors would cozy up to the realtors to find out what houses were coming on the market so they could buy them first. It makes it hard for the average person or couple to try and buy a starter home.
The condo development I was living in before buying my own starter home had 60% of the condos purchased by one guy at prices under $50K during the meltdown and he now rents a 2 bedroom for $1200. A neighbor bought her 3 bedroom for $55K in 2014, they are now priced around $175K.
I was lucky that I was able to buy my late aunt's home or I probably never would have been able to get into my own place.
I also agree with the poster who said today's young people aren't willing to accept the type of starter home that couples did in the 40's, 50's and 60's. Like was said every kid has to have their own bedroom now where this was not the norm until the last 20-30 years. People watch too much HGTV and expect to find the perfect place for their first home.
You mentioned you are in FL . I looked at Miami prices recently and it’s nuts . Homes in what was considered rough areas are now going for like 3x more than a few years ago . I don’t know if the areas have actually changed that much besides the prices . The prices have definitely appreciated a lot more than in L.A in the same time period.
A lot of it is all the money that has poured in from unstable places like Venezuela. A lot of Venezuelans were buying all kinds of businesses in the area too when I was working there a few years ago . They were able to get Visas by buying certain businesses .
Nothing personal, but people who are doing what you are doing are part of the problem.
There are no starter homes, and rents are sky-high due to the lack of affordable homes.
They are solving a problem actually . Fixing up neglected eyesore properties and providing decent housing for families . Not everyone wants to buy even if they can afford to buy .
Many people move around more often for work now and it usually doesn’t make sense to buy right off the bat.
There is strong demand for rentals especially for single family homes .
If someone wants to buy a fixer to live in and fix it up they can . Most homeowners don’t want to go through all that and will gladly buy it from a flipper .
What part of FL are you in ? FL still has some affordable areas even though prices have gone up significantly since the crash years .
However, there is justifiably a problem today since starter homes are not being built. Add to that the fact that most first time buyers have greater expectations than ever of what they require. In the 60's kids had twin beds and shared rooms. Today every kid "needs" a double bed and his own room, sometimes own bathroom. More square footage, please. Hard to know what to do.
My sentiments exactly. Expectations are greatly inflated. Every wife needs granite counter tops, top of the line cabinets, an open kitchen concept, stainless appliances, dishwashers, en suite bathroom in the master bedroom, and a washer and a dryer in the unit. No one starts out at the bottom anymore, they want to be "there."
IMHO, part of the housing crisis is that affordable housing is not being built anymore. In my area, luxury rentals and deluxe houses are being built on a regular basis, and the county plans to gut the US-1 corridor, removing the lower and middle income apartments and replacing them with no doubt, deluxe condos and apartments. Where do the displaced people go? further and further out from their jobs....
They are solving a problem actually . Fixing up neglected eyesore properties and providing decent housing for families . Not everyone wants to buy even if they can afford to buy .
Many people move around more often for work now and it usually doesn’t make sense to buy right off the bat.
There is strong demand for rentals especially for single family homes .
If someone wants to buy a fixer to live in and fix it up they can . Most homeowners don’t want to go through all that and will gladly buy it from a flipper .
What part of FL are you in ? FL still has some affordable areas even though prices have gone up significantly since the crash years .
I'm in Delray/Boca area, but I am not actually looking for a property to buy.
We had a house on the west coast of FL and got stuck in it much longer than we intended due to the crash--until prices came back up and we could escape.
The rents are out of control here, but we don't want to make a commitment and buy, as we may move to Europe in a year or so. Also, we can handle rent close to the water, but the price to buy properties near the water is out of sight.
I just made the comment because of what happened in 2007--a huge amount of houses in Florida were bought up by corporations like Blackstone, who would put down some cheapo new carpet, and turn around and asked exorbitant rents. It was like they were warehousing them.
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