I came across some interesting research from Realtor.com that really gets at what we're all dealing with right now when it comes to finding homes for first-time buyers. They looked at starter homes across the country by defining them as properties priced around eighty percent of each metro's median listing price. That gives you a sense of what's actually affordable and accessible to someone entering the market or earning around the area's median income.
Here's what caught my attention. Nationally, starter homes have gotten significantly more expensive over the past seven years, but here's the real story: the percentage of inventory that's actually priced in that starter tier has barely budged since 2022. Most of that squeeze happened during the pandemic boom, and things have held relatively steady since then. They found that nearly forty percent of homes were starter-priced back in 2019, but now it's down to about thirty-six percent. That means there are over twenty thousand fewer starter homes available today than there would have been if the market composition had stayed the same.
Something I find really telling is how the type of starter home is changing. Seven years ago, almost all starter homes were single-family houses, but now about twenty-seven percent of starter inventory is condos or townhomes. As single-family homes have priced themselves out of reach for entry-level buyers, these smaller units have become a crucial gateway to homeownership in many markets.
The research also breaks down which metros still have meaningful starter inventory and which ones have lost it. Markets like Toledo, St. Louis, and Detroit in the Midwest have held up well, still offering substantial starter home options. Meanwhile, some of those hot Sunbelt markets that boomed during the pandemic like Columbia, South Carolina and Cape Coral, Florida have seen their starter inventory disappear faster than their prices have come back down.
What's particularly useful is how they looked at whether starter homes are spread throughout a metro or concentrated in specific neighborhoods. Take Austin and Charleston, South Carolina, for example. Austin's starter homes are concentrated in certain pockets, mostly eastern areas, which means buyers have real options but need to know where to look. Charleston, by contrast, has enormous price variation across neighborhoods, creating some of the sharpest geographic divides in affordability of any major market. Meanwhile, McAllen, Texas is pretty uniform in price throughout, so you don't really have clear starter neighborhoods because the whole place is relatively affordable.
What I'm seeing locally here in the Bay Area and Fremont is that starter inventory remains tight, and it's concentrated in specific corridors and neighborhoods. The research shows San Jose actually improved its starter home share since 2019, which is encouraging, but that doesn't mean entry-level buyers have equal access across the whole metro. If you're working with first-time buyers, geographic flexibility matters now more than ever. They need to understand not just whether starter homes exist in their target metro, but where those homes actually cluster, because that's where their real options lie.
