Where first-time homebuyers can go big

Bloomberg

You’re a millennial buying your first home. Good work not moving in with your parents or renting a shoebox! But as you make the homeownership leap, you want space: Where can you go, and at what cost?
Research released on Wednesday by Trulia looked at the U.S. metro areas with the largest starter homes, measured by median square footage. Texas lived up to its big reputation, with Austin in the lead and Houston at No. 5. If you’re surprised to see New York in the top 10, know that geographic subset contains more than New York City’s five boroughs, even including (gasp!) parts of New Jersey.
Homes were categorized as “starter” if they were in the bottom third by price when looking at home-value estimates for the housing stock of single-family homes, condos, co-ops, and townhouses in a given metro area. Obviously, it’s not just millennials buying those homes. Anyone can buy a starter home. Meanwhile, you may dream of proximity to the beaches of Honolulu, Fort Lauderdale, or Miami, but median square footage for starter homes in those areas is tight. Then there’s the cost of space. Detroit had the second smallest starter homes, in terms of median square feet, but the cheapest median price per square foot for starter residences.
Of course, there’s more to choosing where to live than square feet. Job availability, proximity to mass transit, work, schools, and family may play a role. Millennials buying their first home might want to do some soul-searching on how long they expect to stay and when their families might expand. “It really does take sort of deep reflection from a personal circumstance standpoint to figure out whether or not they should go big or go small on their first home,” said Ralph McLaughlin, Trulia’s chief economist and the report’s author. And remember: Larger homes are more expensive to own, both in terms of fixed costs (you’ll probably be shelling out more for furnishings) and ongoing costs (higher utility bills). “Starter homebuyers should especially be conscious that going big also means going big from an expense standpoint,” said McLaughlin, “and they really need to factor those extra costs in when making that decision.”