real estate market

Starter houses are increasing their prices and experts say this will be the trend of 2023.

According to an investigation by, the prices of initial houses have increased by up to 15% and it seems, according to experts, that this will be the trend for 2023

The dream of most people is to have their own property, be it a house or an apartment, but something that can be left as patrimony for the next generations or that simply helps to stop paying a rental fee, although in instead you have to pay a mortgage. The real estate market has not been easy in recent months, the volatility of prices, which have generally gone up, have left potential buyers aside. With the year 2023 beginning, a phenomenon is taking place, which according to experts, would set the trend for the entire year: the rapid increase in the prices of initial houses.

Yes, believe it or not, this is happening, as demonstrated by a report by the site, specialized in buying and selling real estate in the United States. And the historical inflation that the country has experienced in the last year has had a lot to do with it.

What is a starter home?

Let’s start breaking it down in parts. To begin with, the initial house is one that is made up of two bedrooms, that is, a really basic house to live in. They are small, affordable, and are generally intended to be the first home for a first-time homebuyer. These types of homes have seen their prices rise like foam, the reason is the constant demand they face, which, according to, creates a bidding war due to limited supply.

These homes have outpaced price growth elsewhere in the housing market and ended 2022 with a staggering 15% year-over-year price increase, explains.

“Starting homes have been on a relatively steady and brisk rise since early 2020, as cash-strapped buyers have competed for a limited supply of more affordable properties,” explains

In which areas are starting house prices rising? research determines what is being seen in these areas:

1.- Nashville, Tennessee
Starting price of the house in December 2022: $349,900 dollars
YoY Price Change: +10.8%
Price change in 3 years: +43.7%

Their prices are the highest in the real estate market in the entire country for a starter home. “Honestly, Nashville has been an undervalued market for a long time,” said Brian Copeland, real estate agent for Doorbell Real Estate in Nashville. “People would come here and be amazed at three-bedroom houses for less than $200,000,” he added.

As of the end of 2022, starting home prices in Nashville are up nearly 11% compared to the previous year, when Nashville’s median listing price growth was about half, noted.

For $350,000 an initial homebuyer in Nashville can get an 800-square-foot two-bedroom home near Tennessee State University.

2.- San Diego, California
Starting price of the house in December 2022: $678,470 dollars
YoY Price Change: +13.5%
Price change in 3 years: +29.9%

Starter homes in San Diego can count half a million dollars. “There is no such thing as a starter home in San Diego anymore. Here they say buy your third home first, because prices are so high right now,” said Norm Miller, professor emeritus at the University of San Diego School of Business.

According to, San Diego real estate prices continue to grow at a rapid rate, one of the fastest in the country.

3.- Houston, Texas
Starting price of the house in December 2022: $255,200 dollars
YoY Price Change: +4.5%
Price change in 3 years: +25.3%

According to, Houston starter home listing prices follow the national trend and continue to rise through the end of 2022 at a faster rate than other market segments. Their costs are increasing at about 4.5% per year, which is still higher than the 3% to 4% home appreciation that was the norm before the pandemic.

For $236,000, you can get this classic 1,500-square-foot, two-bedroom home in Houston’s East End neighborhood, a short drive from Buffalo Bayou.

Initial home vs. luxury home

On the other side of the coin, there are luxury houses, which are characterized by being spacious, with a number of amenities that perhaps you cannot even imagine (or if). During the Covid-19 pandemic, their prices, defined as the most expensive 10% of homes in a given market, skyrocketed at the same time as the stock market. The phenomenon also happened, that, given the contingency of the coronavirus and the closures, people began to look for larger spaces to move and live the quarantines.

In mid-2021 there was an almost 40% increase in the price of luxury homes year over year. But in late 2021, the luxury boom fizzled out as the stock market struggled and fears of an economic downturn mounted. Through most of 2022, luxury homes have seen modest to stagnant price growth, around 2.5%, ending the year almost flat.

Despite the modest to stagnant price growth in luxury homes throughout most of 2022, Seven Springs Villas still offers a variety of luxurious homes to choose from. See homes available in Seven Springs Villas.

The impact of interest rates

This was part of the research carried out by and to arrive at a result they were in charge of comparing the price changes that they were projecting on a monthly basis, year after year, for first-time homes, luxury homes and mid-priced homes. . The idea was to look at how each segment of the real estate market was doing during this time period.

They then focused on five metropolitan areas to study trends for each real estate segment, including the main city and surrounding towns, as well as smaller urban areas.

“Luxury purchases are more discretionary. After all, no one really needs a third or fourth house or a 10,000-square-foot abode with an ocean view. So when market conditions are right, activity in that segment can change rapidly,” Danielle Hale, chief economist at, said in the report.

We must be clear, property owners saw their assets grow, along with their properties, which gave them the opportunity to sell them at a higher price and therefore receive more cash to aspire to a better one.

“The rock-bottom interest rates made borrowing unbelievably cheap. A migration of people who lived in coastal urban centers, but could work from anywhere, also meant that buyers entered markets with high equity and high wages, driving up prices. And the bullish performance of the stock market resulted in more money in their pockets,” notes

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