The price of a typical starter home fell in San Francisco, Austin, and Phoenix, bucking a national trend — here's why
identifies the three metros as the only in the country where the price of starter homes, defined as the 5th to 35th percentile of homes by sale price, declined year over year. Going along with that, they're also the only three metros where the income needed to purchase a starter home declined.
That doesn't mean that these starter homes are cheap, or the incomes needed to afford them are minuscule. According to Redfin, the median sale price of a starter home in San Francisco decreased 13.3% to $910,000; in Austin, decreased 12.2% to $347,300; and in Phoenix, decreased 9.7% to $325,000. The incomes now needed to afford those homes amount to $241,200, $92,000, and $86,100, respectively.
Sheharyar Bokhari, a senior economist with Redfin, told Insider that each of these markets are experiencing whiplash after several years of robust buyer demand and price growth. "Home prices in these cities rose the fastest in the country when interest rates were low, but when interest rates went up really high and quickly, those prices were not completely sustainable," Bokhari said."So, they're moving first, in terms of price declines."in the nation, has seen its median listing price fall 8.8% year over year to $1.4 million as of June, according to data from Redfin.
"With mortgage rates being so high, not as many people are making that decision to buy a home in San Francisco right now," Bokhari said.
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