What’s a starter home in the Boston area?

There is no shortage of demand for Boston-area housing, which is one of the reasons prices remain so high. And that includes demand for starter homes, those supposedly more affordable, less grandiose condos and houses that allow first-time buyers to grab a bottom rung on the property ladder.

Demand for starter homes is expected to only grow in the Boston area. A Zillow report from spring 2019 that tracked the likely real estate habits of millennials—the largest generation yet in American history—found that the area over the next decade is going to see a more than 19 percent jump in the number of potential first-time buyers, one of the largest increases among major U.S. metros.

So it’s more important than ever to understand exactly what a starter home is in the Boston area. It’s not necessarily what current home hunters—and the legions to come—might think.

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It doesn’t have to be small. It seems to be a truism in real estate in general that starter homes are tinier than others. The idea is that smaller equals cheaper. Not so in the Boston area—just witness the fate of micro-apartments during the past decade.

Those tinier units were supposed to storm the city, offering less expensive digs that made up what they lacked in size with ruthless functionality. But the economics of Boston-area development, particularly the high land and construction costs, quickly dashed this notion.

In a region where condos at the end of 2019 averaged $568 a square foot and single-families averaged $330, even smaller spaces can quickly add up price-wise. So what seems like an inexpensive first option on its face might be far from that.

But if it’s bigger, like a house, it’s farther out. The above leads to this corollary: What seems like a more expensive first option on its face might be far from that. In other words, a starter home in the Boston region could very well be a relatively large detached single-family retailing for much less than a one- or two-bedroom condo.

There’s a caveat, though. Many of these larger inexpensive homes are farther from commercial cores such as downtown Boston, Cambridge’s Kendall Square, and Boston’s Seaport District.

For instance, the median sales price for single-families north-northeast of Boston—including in places such as Melrose, Malden, and Medford—was $600,000 at the end of 2019, according to a report from the Greater Boston Association of Realtors and the Warren Group, a local research firm. The median for condos was $440,000. Both were well below the $625,000 and $705,000, respectively, for Boston proper.

So a starter home in the Boston region often becomes a tradeoff between commute time and space. (That’s no small tradeoff, either, as the region has some of the nation’s worst traffic congestion and its mass transit has some downsides, to say the least.) The more affordable options are might near commercial cores, but the more affordable sizable ones most certainly are not. No 2,500-square-foot moderns for young couples in Boston proper, no matter what Peloton depicts.

There can be a plus to those smaller, more expensive starter homes. The ones farther in within the region tend to be in newer developments. That’s a feature—or a bug, depending on your viewpoint—of the region’s recent historic building boom.

Most of the units in newer projects have been studios and one- or two-bedrooms. What’s more, these units have tended to be on the smaller side. And, while smaller does not necessarily equal cheaper, they are going to be cheaper than the larger and rarer three- and four-bedroom units. So, if you’re hunting for an affordable first condo in a downtown area, newer developments will likely provide the most options.

That’s where the plus comes in: These developments tend to be ladened with amenities targeted toward people easing into urban ownership. Everything from fitness centers to pet spas to electric-car-charging stations to bike storage is de rigueur in newer Boston condo developments.

So what is a starter home in the Boston area? It’s a first home that is on the more affordable side—affordable being a relative term in Greater Boston. It’s also on the smaller side if it’s farther in toward downtown Boston, but on the larger side if it’s farther out. If it’s on the smaller side farther in, too, it will come with more in-house and in-building amenities.

These cost considerations and the tradeoff between commute time and space go a long way toward explaining why most Boston-area residents, particularly in its namesake city, rent rather than own (though finding an affordable first place there is no picnic either).