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EDITORIAL: Clearing the tall starter-home hurdle

| June 12, 2024 1:00 AM

Young families, the numbers are stacked against you and your American Dream.

Those of you saving, hoping, saving some more and praying a lot are up against an invisible wall in buying your first home.

Sure, you’re willing to compromise, even with a young child in the nest and plans for more put on hold. Smaller than you need with fewer things that you want? You can do that — but even so, the economic gods are conspiring against you.

Industry experts define starter homes as costing 75% or less of the median home sales price in the market. The latest Kootenai County median single-family residential resale price was $525,000, according to Jennifer Smock of Windermere Coeur d’Alene Realty. That puts a starter home at $393,750 or less.

Even for an industrious, frugal young family, that’s a lot of money, starting with a standard 20% down payment of almost $80,000. 

But you can’t buy what doesn’t exist. 

According to national housing data, about 400,000 starter homes were being built every year in the 1970s. By 2020? Maybe 65,000 a year in the entire country.

And now, here in Kootenai County? 

“There is no new construction out there coming in under $400k any longer,” Smock said.

Smock said that of the 529 single-family houses (on less than 2 acres) on the market in Kootenai County, only 21 were priced under $400,000. A quick check showed a number of those were condos, which might carry additional HOA fees that would put the purchase out of reach of some in the starter home market.

The challenges may seem insurmountable: high prices, high down payment and high interest rates comprise a terrible trifecta for starter-home seekers. To complete the demoralizing picture, inventory is pathetically low because people ready and willing to move up from their starter home can’t afford that next house — which probably isn’t on the market anyway.

But continued patience and fiscal discipline are major assets for starter-home seekers when combined with an essential ingredient: a plan.

While our market is low on housing inventory, it’s blessed with an abundance of housing experts. Contact the Realtor of your choice and develop a plan that can lead to realization of your own American Dream.