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Study: Greater Boston starter homes becoming more difficult to attain

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Not only are starter homes in Greater Boston relatively unaffordable, but they are slipping further out of reach for many consumers.

That was the finding of a very interesting new study from Trulia, which assessed the status of starter homes in a housing market that is growing increasingly pricey and unaffordable.

Here in Greater Boston, the median list price for starter homes is currently $261,583, and it requires 56.4 percent of the typical starter buyers’ income to purchase such a home. Short of San Francisco, those numbers are among the highest in the country, and Greater Boston’s list price is still up 7.7 percent from a year ago (while starter home inventory slightly down). As a result of those trends, the share of income needed has risen 15.57 percent since 2012, and it comes at a time when wages and incomes remain flat for most prospective buyers of starter homes.

Starter homes in peril?

Greater Boston’s starter home market is largely consistent with the national trends: inventory is down 12.1 percent, income requirements are up 1.9 percentage points, and starter homes comprise less than 25 percent of available inventory, while premium homes comprise more than half. It is all consistent with our past reporting on new construction, which has tracked how homebuilders have dramatically shifted their focus to homes for upper-income consumer.

See our chart below for a deeper look at the starter home market:

U.S. Metro Median Starter Home List Price, 2016 Q4 Starter Home List Price Change, 2015 Q4 to 2016 Q4 Starter-Homebuyer Income Needed to Buy Starter Home Inventory Change, 2015 Q4 to 2016 Q4 (Percentage Change)
Atlanta $80,000 7.5% 20.2% -1.4%
Boston $261,583 7.7% 56.4% -3.2%
Chicago $108,633 9.0% 32.2% -0.6%
Denver $236,000 16.1% 41.9% 1.8%
Houston $104,967 16.6% 27.7% -0.6%
Los Angeles $349,967 8.8% 90.6% -1.1%
Miami $152,317 17.2% 51.6% 0.1%
New York $215,000 1.7% 53.5% -2.0%
Philadelphia $59,967 0.1% 21.2% 4.3%
Phoenix $150,633 13.3% 37.2% 1.0%
San Francisco $751,333 7.4% 119.7% 3.1%
Seattle $281,650 11.2% 49.4% 4.5%

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