Some reasons the starter home is losing interest among those in the building industry:
• Land costs are more costly, and many of the lots during the first part of the housing recovery within the last few years have been finished lots of “A” quality – with not much attention devoted to B, C, and D lots that would have been traditionally geared toward entry-level homes. Lots that could be used for entry-level homes involve high-density or outer-circumference subdivision tracts. Costs of lots in those areas and relief on some construction defects litigation on attached homes, need to come down quite a bit for there to be a return of entry level housing.
• Higher fees in building these communities also deter entry-level buyers to the new-home market. Builders often face large infrastructure and support service costs. These fees and charges also get added on to the price of new homes, which adds an extra 20 to 25 percent of the cost of a new home.
• The typical “entry-level” buyers do not want “starter” homes any longer. Millennia’s have waited, paid down student debt, married, and are ready to move into a permanent home rather than buy a starter home and move again a few years down the line.
The “starter” home may well be a thing of the past. Buyers are more patient and more willing to wait until they find their “dream home” rather than buying the first thing available. If you have questions or would like more information, please feel free to contact us today.