Starter Homes Now A Dinosaur?

Not sure if applicable to this overall expensive area, but still a decent read…

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And more than one-third of those surveyed (35%) said they intended to be “one and done” — actually planning to retire in their first home.

This is exactly me.
After going through emotionally exhausting home buying process, I am so determined to retire in my first home.

Well, I have long way to catch up with most of people here especially from mindset perspective.

And maybe that’s why people like me look for expansion potential or big lots associated with a subject property. I want to know upfront what I can or can not do (most likely). If a house is small sitting on a small lot, nothing is going to change that. And, It is simply so tough here. Again, everyone has money…and you know what I mean when I say that. Come on, a SMALL home here is 1M or more in most locals and there are hordes of people who can pony that amount up with with a personal check!!! Yikes!!!

@sfdragonboy :slight_smile:

I have been talking to some people that are doing renovations instead of going out to buy a step up home while they sell the starter home. It has to do with the fact that is an emotional process and perhaps they think about all the pain that it causes to both seller and buyer, nonetheless the constant feeding of Realtors who prey on this situation.

I am not going to sell this home and buy another one, ever! The pain and suffering when you are first time homebuyer waiting for an offer to be accepted and the escrow process closing doesn’t have a price tag. Believe me!

And let’s be honest, we forgot a big factor: the potential big bump in your property tax bill when you trade up. That is a big one for me. Even though my wife and I both work so that we could probably swing a nicer home in the peninsula my wife will not like to hear me groan twice a year about how high that property tax bill is.

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I struggled with the idea of doubling my property tax bill for no additional benefit. It kept me from upgrading.

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Back in 2009-12 people were afraid and bought small crap shack starter homes instead of stretching to the max…Now they are stuck in their starter homes…Better to stay put and remodel than have your property tax double when you move up… .Of course some people on this forum are renting out their starters and moving up anyway

Guys,

So, what is the answer to this problem? First time buyers can’t buy since there is no inventory. Developers are passing since well no money in starter homes. Prefab conceptually would be a great idea if it ever scaled up and became commonplace. The fact is, currently, people like you and I are and able to buy pretty much anything that comes to market and thus shut out the first time buyers. Would it take some draconian federal law regarding limits on buying? Ideally, it should be a law that makes owners/seller want to free up inventory but I suppose that would be sfdragonboy dreaming again…

Sorted by Highest to lowest price
http://www.corelogic.com/downloadable-docs/dq-news/ca-home-sale-activity-by-city-april-2017.pdf

County/City/Area # Sold Median $ Apr 2017 Median $ Apr 2016 % Change Yr-to-Yr

  1. ATHERTON 13 $5,100,000 $5,762,500 -11.5%
  2. PORTOLA VALLEY 8 $3,585,000 $3,325,000 7.8%
  3. ROSS 3 $3,375,000 $4,525,000 -25.4%
  4. BELVEDERE TIBURON 21 $3,100,000 $2,250,000 37.8%
  5. LOS ALTOS 48 $2,999,750 $2,962,550 1.3%
  6. PALO ALTO 42 $2,600,000 $2,490,000 4.4%
  7. DIABLO 3 $2,575,000 $1,550,000 66.1%
  8. SARATOGA 30 $2,491,500 $2,220,000 12.2%
  9. MENLO PARK 42 $2,450,000 $1,900,000 28.9%
  10. BURLINGAME 41 $2,300,000 $2,280,000 0.9%
  11. SAUSALITO 13 $1,954,000 $1,047,500 86.5%
  12. CUPERTINO 35 $1,850,000 $1,795,000 3.1%
  13. LOS GATOS 53 $1,741,500 $1,662,500 4.8%
  14. LARKSPUR 14 $1,692,500 $1,345,250 25.8%
  15. ALAMO 26 $1,617,500 $1,843,750 -12.3%
  16. ORINDA 28 $1,591,250 $1,293,500 23.0%
  17. BELMONT 22 $1,550,000 $1,502,500 3.2%
  18. REDWOOD CITY 67 $1,550,000 $1,204,000 28.7%
  19. PENNGROVE 3 $1,542,500 $710,000 117.3%
  20. GREENBRAE 20 $1,503,000 $1,195,000 25.8%
  21. MILLBRAE 17 $1,500,000 $1,688,000 -11.1%
  22. LAFAYETTE 45 $1,424,000 $1,385,000 2.8%
  23. SAN CARLOS 32 $1,405,000 $1,415,000 -0.7%
  24. SAINT HELENA 5 $1,399,000 $789,000 77.3%
  25. SUNNYVALE 86 $1,379,000 $1,110,000 24.2%
  26. MILL VALLEY 35 $1,345,000 $1,400,000 -3.9%
  27. SAN ANSELMO 20 $1,345,000 $1,003,000 34.1%
  28. MOUNTAIN VIEW 65 $1,345,000 $1,310,000 2.7%
  29. CORTE MADERA 9 $1,295,000 $1,037,000 24.9%
  30. CARMEL 33 $1,275,000 $1,029,000 23.9%
  31. MORAGA 21 $1,250,000 $1,156,000 8.1%
  32. SAN FRANCISCO 388 $1,244,000 $1,300,000 -4.3%
  33. San Mateo County 556 $1,210,000 $1,075,000 12.6%
  34. SAN MATEO 116 $1,210,000 $1,077,000 12.3%
  35. DANVILLE 104 $1,198,300 $1,180,000 1.6%
  36. CARMEL VALLEY 12 $1,189,500 $791,000 50.4%
  37. BERKELEY 55 $1,140,250 $1,117,500 2.0%
  38. PEBBLE BEACH 8 $1,080,000 $1,393,000 -22.5%
  39. PACIFIC GROVE 10 $1,063,500 $735,000 44.7%
  40. HALF MOON BAY 16 $1,046,500 $885,000 18.2%
  41. Marin County 320 $1,035,500 $960,000 7.9%
  42. SANTA CLARA 100 $1,009,091 $932,000 8.3%
  43. CAMPBELL 51 $1,000,000 $1,040,000 -3.8%
  44. SAN RAMON 130 $976,000 $907,000 7.6%
  45. PLEASANTON 92 $970,000 $1,005,000 -3.5%
  46. OCCIDENTAL 3 $961,250 n/a n/a
  47. SAN BRUNO 28 $935,000 $770,000 21.4%
  48. BRISBANE 4 $934,750 $640,000 46.1%
  49. Santa Clara County 1,590 $920,000 $860,500 6.9%
  50. FREMONT 185 $905,000 $842,500 7.4%
  51. ALAMEDA 54 $900,000 $850,000 5.9%
  52. SAN RAFAEL 85 $899,000 $930,000 -3.3%
  53. FAIRFAX 5 $897,000 $827,000 8.5%
  54. SOUTH SAN FRANCISCO 32 $891,000 $777,500 14.6%
  55. HEALDSBURG 18 $881,000 $849,500 3.7%
  56. MILPITAS 70 $872,500 $801,000 8.9%
  57. BODEGA BAY 2 $869,250 $715,000 21.6%
  58. PACIFICA 36 $865,000 $840,000 3.0%
  59. ALBANY 14 $862,500 $725,000 19.0%
  60. DALY CITY 62 $830,000 $822,500 0.9%
  61. SAN JOSE 881 $820,000 $760,000 7.9%
  62. DUBLIN 120 $812,000 $849,000 -4.4%
  63. MONTARA 5 $810,000 $1,053,000 -23.1%
  64. SEBASTOPOL 23 $800,000 $635,000 26.0%
  65. APTOS 35 $799,500 $745,500 7.2%
  66. EL CERRITO 21 $792,500 $772,500 2.6%
  67. NOVATO 84 $788,000 $738,000 6.8%
  68. CASTRO VALLEY 57 $775,000 $655,000 18.3%
  69. UNION CITY 51 $775,000 $726,000 6.7%
  70. CLAYTON 27 $775,000 $642,000 20.7%
  71. SANTA CRUZ 79 $770,000 $780,000 -1.3%
  72. SCOTTS VALLEY 14 $770,000 $739,000 4.2%
  73. PALO ALTO 7 $760,000 $690,000 10.1%
  74. NEWARK 54 $758,500 $737,000 2.9%
  75. Alameda County 1,386 $740,000 $685,250 8.0%
  76. MORGAN HILL 43 $739,000 $812,500 -9.0%
  77. WALNUT CREEK 130 $730,000 $725,000 0.7%
  78. SOQUEL 6 $715,000 $810,000 -11.7%
  79. LIVERMORE 118 $698,000 $674,000 3.6%
  80. GILROY 77 $695,000 $631,500 10.1%
  81. MONTEREY 28 $677,500 $635,100 6.7%
  82. PLEASANT HILL 40 $675,250 $632,500 6.8%
  83. Santa Cruz County 202 $674,000 $675,000 -0.1%
  84. OAKLAND 294 $670,000 $555,000 20.7%
  85. PETALUMA 77 $665,000 $630,000 5.6%
  86. BEN LOMOND 6 $657,500 $515,000 27.7%
  87. THE SEA RANCH 8 $655,000 $587,500 11.5%
  88. FELTON 9 $650,000 $550,000 18.2%
  89. CAPITOLA 14 $639,500 $610,000 4.8%
  90. EMERYVILLE 29 $635,455 $587,000 8.3%
  91. AROMAS 4 $631,000 $605,000 4.3%
  92. NAPA 80 $625,050 $591,000 5.8%
  93. Napa County 101 $625,000 $575,000 8.7%
  94. BOULDER CREEK 4 $595,000 $520,000 14.4%
  95. HAYWARD 143 $585,000 $510,000 14.7%
  96. SONOMA 45 $585,000 $569,000 2.8%
  97. Contra Costa County 1,381 $579,000 $520,000 11.3%
  98. BRENTWOOD 114 $576,500 $579,000 -0.4%
  99. Sonoma County 514 $568,000 $505,000 12.5%
  100. EL SOBRANTE 18 $562,500 $470,000 19.7%
  101. BENICIA 37 $555,000 $427,000 30.0%
  102. SAN LORENZO 15 $550,000 $510,000 7.8%
  103. WINDSOR 26 $550,000 $550,500 -0.1%
  104. MARTINEZ 59 $549,000 $454,000 20.9%
  105. COTATI 6 $527,500 $530,000 -0.5%
  106. SANTA ROSA 203 $522,500 $455,000 14.8%
  107. DISCOVERY BAY 29 $515,500 $502,000 2.7%
  108. SAN LEANDRO 100 $512,500 $500,000 2.5%
  109. PINOLE 16 $512,000 $475,000 7.8%
  110. MARINA 28 $510,250 $537,000 -5.0%
  111. Monterey County 295 $510,000 $495,000 3.0%
  112. WATSONVILLE 29 $510,000 $480,000 6.3%
  113. AMERICAN CANYON 14 $498,500 $345,000 44.5%
  114. RIPON 22 $497,000 $413,750 20.1%
  115. TRACY 168 $495,000 $437,500 13.1%
  116. CONCORD 130 $490,000 $492,500 -0.5%
  117. SEASIDE 20 $482,500 $410,100 17.7%
  118. CLOVERDALE 20 $471,250 $399,000 18.1%
  119. OAKLEY 87 $460,000 $420,000 9.5%
  120. ROHNERT PARK 42 $460,000 $450,000 2.2%
  121. SALINAS 87 $439,000 $395,000 11.1%
  122. RODEO 8 $430,000 $392,500 9.6%
  123. CROCKETT 4 $426,500 $469,000 -9.1%
  124. HERCULES 27 $424,000 $440,000 -3.6%
  125. DIXON 29 $420,000 $360,000 16.7%
  126. PITTSBURG 77 $415,000 $395,000 5.1%
  127. VACAVILLE 153 $410,000 $362,000 13.3%
  128. GONZALES 2 $401,000 $356,000 12.6%
  129. LATHROP 51 $400,000 $380,000 5.3%
  130. FAIRFIELD 140 $398,750 $395,000 0.9%
  131. Solano County 590 $392,000 $350,300 11.9%
  132. LOCKEFORD 3 $390,000 $302,500 28.9%
  133. SOLEDAD 14 $387,000 $344,000 12.5%
  134. SUISUN CITY 42 $380,000 $334,500 13.6%
  135. MANTECA 143 $375,000 $366,000 2.5%
  136. GLEN ELLEN 5 $375,000 $552,500 -32.1%
  137. RICHMOND 83 $370,000 $333,500 10.9%
  138. FORESTVILLE 7 $355,000 $439,000 -19.1%
  139. VALLEJO 153 $351,000 $305,000 15.1%
  140. ANTIOCH 114 $350,750 $357,000 -1.8%
  141. MAMMOTH LAKES 48 $350,000 $399,750 -12.4%
  142. ESCALON 8 $340,000 $268,000 26.9%
  143. San Joaquin County 848 $336,000 $300,000 12.0%
  144. SAN PABLO 26 $335,000 $370,500 -9.6%
  145. LINDEN 2 $332,500 $348,500 -4.6%
  146. RIO VISTA 28 $330,250 $304,500 8.5%
  147. GUERNEVILLE 9 $326,000 $360,250 -9.5%
  148. LODI 76 $320,000 $290,000 10.3%
  149. BROOKDALE 2 $292,500 n/a n/a
  150. GREENFIELD 6 $291,750 $289,000 1.0%
  151. HILMAR 8 $287,750 $240,500 19.6%
  152. LOS BANOS 47 $285,000 $284,000 0.4%
  153. WOODBRIDGE 3 $280,000 $253,250 10.6%
  154. KING CITY 12 $267,500 $235,000 13.8%
  155. STOCKTON 363 $246,000 $220,000 11.8%
  156. Merced County 212 $239,750 $208,000 15.3%
  157. ATWATER 33 $237,000 $205,000 15.6%
  158. WEED 15 $229,000 $142,500 60.7%
  159. DELHI 12 $222,500 $215,000 3.5%
  160. MERCED 88 $221,250 $192,500 14.9%
  161. LIVINGSTON 4 $199,750 $185,000 8.0%
  162. MOUNT SHASTA 10 $195,000 $243,500 -19.9%
  163. GUSTINE 6 $192,250 $217,500 -11.6%
  164. DOS PALOS 4 $182,000 $66,500 173.7%
  165. DUNSMUIR 3 $169,000 n/a n/a
  166. Siskiyou County 63 $161,300 $119,000 35.5%
  167. ETNA 4 $151,719 $191,500 -20.8%
  168. SAN ARDO 2 $145,750 n/a n/a
  169. WINTON 8 $136,550 $155,000 -11.9%
  170. FRENCH CAMP 2 $108,000 n/a n/a
  171. YREKA 16 $105,000 $97,500 7.7%
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The obvious one is do away with Prop 13. Announce today, gradual increase to market rate over 3 years.
At the beginning of the third year, announce conversion of all fixed interest rate housing mortgage to floating rate at the beginning of the fourth year.

Simple just suspend zoning laws for 3 years…Builders will build to the demand, problem solved

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Well, Prop 13 is only CA. I want legislation from the federal government that would apply throughout the land. Be it tax legislation or whatever. The Golden State gets the front page all the time on this subject but surely other states are in the mix too.

Not so sure starter homes level would be dramatically impacted by interest rate policy change. A lot of people with starter homes have already paid them off or have low mortgage balances. Come on, I have a 15 yr, 2.5% interest rate on my Sunset home. Balance owed is fairly low as it is. What is it that will incentivize me to say, Sweetie, let’s sell our oasis home and move to Singapore? It is has to be a policy that is viewed favorably by someone like me or I simply won’t do it. The best example is the 250k/500k capital gain exclusion on primary residents. I am sure that policy is responsible for a lot of places being put back into the market for sale.

On increasing supply side by letting developers go hog wild, would that really mean that they would build more starter homes though? Not sure about that. Land is expensive, so unless they can go unlimited on height to build more units so cost per unit can be cheaper, not sure again the starter home market will expand significantly enough to help the masses. There are enough homes out there right now. How do we get them into the MLS???

If buiders were unfettered then many people would move out of their old starter crap shacks, to allow in newcomers, into new shfs in new developments, like on San Bruno mtn, The Salt works in Redwood Ctiy…At least 50k houses in these two areas alone…Sure highrises would help…But there are huge areas in San Mateo county that could be opened for development, also in Alameda and Contra Costa…House boat communities could be built in the south bay and in Marin…There are endless possibilities…as many as there environmentalists who want not to do anything to add more housing…It is all about politics and right now the nimbys, envro-nazies and the liberal political macine control growth to the detriment of all future homeowners…

I mean come on, we can put a man on the moon but we can’t come up with a creative, national policy that in theory would kill two birds with one stone? I am saying we have the supply of starter homes already. No need to build more. How do we get sellers of these typically smaller and cheaper homes to want to vacate them and push them into the market? Gotta be a way…

Easy. Limit home ownership to individuals only and 2 per tax return. It’d force all the landlords hoarding properties to sell. The shock of supply would definitely lower prices. Plus, you’d remove investors from the buyer pool.

Don’t need more starter homes…Just build market rate move up homes priced to attract established homeowners. …Nobody can make money on starter homes when lot prices are $500k min like in the BA…They only work in places like Bakersfield where lots are $20k and starter homes are $150k

This is inconsistent with liberalism :slight_smile: even Singapore doesn’t do that, Singapore introduces ABSD which is not possible here because house transaction is considered private transaction.
I want to achieve the same purpose as above i.e. force all landlords to sell, shock of supply lead to lower prices.
Doing away fixed interest mortgage makes it highly risky to hold too many rental houses :slight_smile: on mortgage, especially those using rental as income to buy more. Also, no prop 13 and no non recourse. Current rules make investing in RE not so risky and induce people to hold and rent seeking activity.

How do they build a new house under 150k construction cost in Bakersfield? I want to hire this builder to build many houses in BA

Maybe if you only repeal prop 13 for non-primary residence. I think it could just drive up rents even faster though. Only a certain percent of the population is qualified to buy. The rest must rent due to low FICO, lack of down payment, etc. If expenses for all landlord increase, then they can increase rents.

Most of the world has variable rate mortgages. Rates go up lagging inflation. Inflation means higher incomes, and you can charge more rent.

Only the purchase loan is non-recourse. How many never refinance a rental? I thought most refinance periodically to pull equity to buy more rentals.

I’m confused why people who are landlords want policies that’d force landlords to sell.