Reanna Martinez

CaDre #01957040



Starter Homes Are Making A Comeback

Starter Homes Are Making A Comeback by myCAREexpert
Starter Homes Are Making A Comeback by myCAREexpert


Starter homes were declared “nearly extinct” in 2015.  This year, building is on the rise.


Home prices are high and inventory is low as we head into the summer months.  Competition for median-range homes has been fierce, with many would-be homeowners being edged out by bidding wars.  But help may be on the way.

According to a recent analysis by Builder, a national home building magazine, the number of homebuilders offering entry-level housing is on the rise, over 25% from last year.  This segment of the market has been floundering since the recession.  A 2015 report by California’s Legislative Analyst’s Office found that the State’s astoundingly inflated real estate market could have likely been prevented had millions of homes and apartments been built over the course of the past three decades, instead of the mere thousands that have been. 

Builder 1

While the numbers are rising, the entry-level market is still a fraction of what is once was in 2010.  Developers still face the challenges of a shortage of lots and labor, and tight access to construction and development loans.  Builders are remaining cautiously optimistic about market conditions, and many are devoting up to 50% of their business to the entry-level market.

This is great news for entry-level homebuyers as 2016 should be the first year since the Great Recession in which the growth rate for single-family production exceeds that of multifamily.  The National Association of Home Builders (NAHB) predicts that single-family production will see a 14% uptick this year to 812,000 units.  This will likely drive the acceleration of single-family sales growth in 2017 as the supply chain mends and production expands.  NAHB reports that single-family stats will reach 64% of historically normal levels by the 4th quarter of this year, and rise to 77% of normal by the end of 2017.  

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0 Responses

  1. I wish there had been estimate of what the price of these new starter homes are going to be. My cousin bought a lovely home in the city of Los Angeles in October 2001 for a then-starter price of $357,000. It is a small home in a well-maintained neighborhood and now, 16 years later his “starter” home is valued at over a million dollars!!. Clearly a million dollar mortgage is not a place to start for new homeowners. So, I wonder, what will be the prices of these newly-built “starter” homes?

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